Home sales in India this year to be 30% higher than in 2022: Colliers

Industry numbers show that home sales this year have already crossed the total sales in 2022, the consultancy said

Owing to the festive season, home sales in 2023 are expected to be 20-30 per cent higher than in 2022, real estate consultancy Colliers India released on Thursday said. It said that industry numbers show that the sales this year have already crossed the total sales in 2022.

"Typically, the October-December quarter (Q4), marked by higher inclination of homebuyers to wrap-up property purchases in the festive period and instantaneous liquidity benefit aided by developers offering attractive discounts, has historically provided the final push to residential activity," said Badal Yagnik, chief executive officer (CEO), Colliers India

"Close to 40 per cent of the annual residential units sold, achieve closure in the last quarter of the year. Industry consensus is indicative of 2023 housing sales already reaching close to 2022 levels and given the ongoing festive season, 2023 is likely to witness 20-30 per cent higher sales as compared to 2022," Yagnik added.

The consultancy said that the sales have historically been higher in the last quarter of the calendar year. In 2022, 42 per cent of all home sales took place in that quarter. It was also evident in the years that were impacted by the Covid-19 pandemic and the interest rate hikes. In 2021, it was 39 per cent and 37 per cent in 2020. This year, the quarter is also expected to top over 33 per cent of total homes sold in the year.

This year, however, there are several factors which are contributing to higher home sales. First, the sentiment has been high throughout the year. In various quarters, the residential sales crossed the all-time-high mark.

Second, to negate the impact of the Covid-19 pandemic, various state governments stepped in with a reduction of stamp duty and registration charges by up to 2 per cent. "In fact, homebuyers, nudged by the significant one-time monetary outflow reduction, purchased homes even in otherwise turbulent times marked by financial and economic volatility," Colliers India said.

Third, in India, homebuying remains to be driven by emotions more than interest rates.

"At the industry level, a low correlation between home loan disbursements and repo rate changes establishes the fact that residential segment activity in India is more governed by the sense of identification and belonging that comes with home ownership, rather than fleeting financial gains brought in repo rate movements. Buyers with serious purchase intent are likely to stretch their budgets in purchasing homes that align with their desired identity and lifestyle," the company said.

According to Vimal Nadar, senior director and head of research at Colliers India, due to interest rate changes, homebuyers are more likely to alter the location, stage of construction, ticket size, unit size, preference of developer and bouquet of amenities in the housing society, rather than hasten or delay the purchase decision itself.

Other factors leading to higher sales include new launches, bumper discounts, tie-ups between developers and home furnishing firms, innovative payment schemes and targeted marketing campaigns.