Home sales in NCR touch 10-yr high, flats upwards of Rs 1 cr most in demand

Residential sales in Delhi-NCR touched a 10-year high in the first half of 2023 at 30,114 units, of which Gurugram accounted for more than half the units sold with a 52% share, according to a report by real estate consultancy firm Knight Frank India. 

Noida and Greater Noida cumulatively accounted for a 32 per cent share of the total pie. Ghaziabad accounted for 12% share whereas Delhi and Faridabad accounted for 2% share each.

The 2023 residential sales volume represents a 3 per cent  annual growth over the first half of 2022.

Why have sales in NCR touched a 10-year high
" Surpassing the previous sales high of H2 2022 has been possible due to two primary reasons: a) a pause in the repo rate hike cycle in 2023 which brought relief to homebuyers, and b) new inventory coming to the market that has been well received by interested buyers.

Due to a lack of ready to move in inventory by credible developers, any new inventory introduced by such developers has found takers in the market as it comes out of the shadow of the pandemic. Post pandemic, buyers’ confidence in timely delivery of new projects has been reinstated to some extent. These factors have contributed to making H1 2023 the strongest half yearly period since H1 2013," said Balbirsingh Khalsa, Executive Director  at Knight Frank

New launches have dipped
However,  new launches moderated from 34,507 units in H2 2022 to 29,738 units in H1 2023.

 Though developers continued to launch new projects to meet the latent homebuying demand, many have simultaneously intensified efforts for new land acquisition in preparation for a future pipeline of projects. 

NCR’s key peripheral belts are witnessing new launches comprising amenities-rich group housing, independent floors and gated plotted developments which meet the demands of the new age homebuyer.

In NCR, Gurugram accounted for a mammoth 82% of the total half yearly launches. 

Houses costing more than Rs 1 crore comprise of 65% of sales in NCR

The share of residential homes that cost upwards of Rs 1 crore in the total sales volume has consistently surged in NCR since the second half of 2021. From 37 per cent in the first half  2021, the share of this category expanded to 41 per cent  in the first half of 2022. In the second half of 2022, this ticket size category comprised half of the region’s total sales volume before rising to 65 per cent in H1 2023. 

"In a thriving NCR market, witnessing a remarkable 10-year high in home sales, the surging demand for flats priced above Rs 1 crore underscores the immense growth potential and profitability within the real estate sector. This robust momentum serves as a catalyst for developers to explore innovative designs, embrace sustainable practices, and push the boundaries of development," said Kunal Rishi, COO, Paras Buildtech.

What is driving sales at such high ticket prices?

"Ownership of spacious and independent homes by high-net-worth individuals and affluent families is driving the homebuying spree for this ticket size category," said the report. 

For the Rs 50 lakh to Rs 1 crore category, the percentage share in total sales volume has declined from 33% in the first half of 2022 to 22% in the first half of 2023. For products priced less than Rs 50 lakh,  the percentage share has shrunk from 25% to 13% in the same period. "In particular, this category has been the hardest hit by the repo

rate revisions as the buyer profile for such products usually look at affordable options for home ownership and any changes to lending costs and EMIs hampers their decision-making much sooner," said  Vivek Rathi - National Director - Research.

Gurugram remains a key hub for primary residential sales in NCR
 

Since the second half of 2019, Gurugram’s share in NCR’s total sales volume has only expanded with each half-yearly period. From a 12% share in H2 2019, Gurugram’s share has grown to 52% in H1 2023. 

New launches in multiple formats such as independent floors, gated plotted developments and high-rise apartment projects from credible developers have ensured healthy sales velocity in its various locations, noted the report. 

 Large township projects on Golf Course Extension Road, New Gurugram and along the Dwarka Expressway are witnessing healthy sales velocity now that the expressway’s completion is visibly imminent.

"Gurugram’s high rise living resonates well with both first generation and second-generation homebuyers looking for a lifestyle upgrade, a trend that has only picked up post the pandemic outbreak. Connectivity between the main areas of Gurugram and its developing peripherals is being enhanced continually to support its real estate boom," said Shishir Baijal, Chairman and Managing Director at Knight Frank India. 

 In H1 2023, new launches in Gurugram comprised 82% of NCR’s total launch pie

From a mere 19% share in H1 2021, Gurugram’s share has swelled to 82% in the current review period as many new projects have been launched in the developing peripherals. Robust homebuying demand supported by enhanced connectivity has been instrumental in developers taking exposure on Golf Course Extension Road, New Gurugram and Dwarka Expressway. In H1 2023, new residential launches took place in Sector 53, 63, 76, 77, 79, Badshahpur, 37D, 93, 103 and 11. 

"We are thrilled to witness the robust surge in home sales in the NCR, reaching a remarkable 10-year high. It is a testament to the resilience and vibrancy of the real estate market in this region. The escalating demand for flats valued upwards of Rs 1 crore further emphasizes the evolving aspirations and purchasing capacity of buyers in NCR" said Vivek Singhal, CEO, Smartworld Developers.

Dwarka Expressway is the hotbed for investment 

Real estate developers in NCR have been acquiring land through outright purchases and also tying up with landowners to develop new residential projects as the homebuyer demand has not only remained higher than the pre-pandemic peak of 2019 but grown manifold.

 Additionally, multiple upcoming infrastructure upgrades such as the Dwarka Expressway, the Delhi-Mumbai Expressway and the Gurgaon Metro from HUDA City Centre to Cyber City are expected to fuel the growth of the real estate sector in NCR and boost demand in the coming years. 

Residential price movement in key areas

“ In the past few years, developers have redirected their focus back to Delhi’s real estate market. Today’s home buyers desire a well-planned community living, with an environment that promises comfort, privacy, and security. Expansive open spaces, walking areas, and green vistas within the complex, amid a well-connected neighbourhood with every urban amenity close by, are some of the demands that Delhiites are yearning for while investing in a new home. This steadfast demand has seen the Delhi real estate market gradually metamorphose from a secondary market to a primary development opportunity in the past few years, with options to chose from, for luxury gated high-rise communities coming up in the city that offer all amenities, facilities, and safety within the complex," said Aakash Ohri, Group Executive Director and Chief Business Officer, DLF Ltd.