Housing demand strong in major cities, but euphoria easing: Pirojsha Godrej

Demand for residential properties remains "very strong" across major cities but the euphoria seen in the last few years is mellowing down a little bit, said Pirojsha Godrej, the executive chairperson of Godrej Properties.

Godrej Properties is one of the leading real estate developers in the country. It became the largest listed realty firm in 2024 in terms of sales bookings or pre-sales by selling more than Rs 28,000 crore worth of properties.

In an interview with PTI, Pirojsha Godrej noted that there is no demand slowdown in the housing market, as reflected from the company's pre-sales numbers.

"Am I seeing a slowdown in demand. The answer is 'No'. Because we have seen Rs 500 crore plus sales in our new housing project launches in five different cities (during the December quarter) across North, South, West and East India. That to me is pretty indicative of a very strong housing market," he said.

Pirojsha added: "But, I would say that some of that euphoria is perhaps mellowing down a little bit, particularly in Delhi-NCR... It has settled into a more sort of standard strong market."  "Euphoria that was there 6-12 months ago seems to have cooled off a little bit, but demand remains very strong," he observed.

During the third quarter of this fiscal, Pirojsha highlighted that the company achieved sales of Rs 500 crore plus in five new launches in five cities -- Mumbai Metropolitan Region, Bengaluru, Gurugram, Pune and Kolkata.

"This is perhaps for the first time that any developer in the country has seen such a positive response from new launches across that many cities," he said.

Recently, HDFC Capital Advisors MD and CEO Vipul Roongta also mentioned that growth in housing prices has slowed.

"Clearly the euphoria, which was there say maybe a year, year and a half back, related to increase in prices is no longer there in any of the micro markets, irrespective of segment, irrespective of brand," Roongta observed.

Real estate data firm PropEquity pointed out 9 per cent drop in housing sales last year across nine top cities while property consultant Anarock reported 4 per cent fall in seven major cities.

Nevertheless, most of the listed developers are clocking robust pre-sales as consumer demand is shifting towards big and branded players with repute.

In its latest investors presentation, Godrej Properties said, "Highest ever booking value and area sold achieved by any listed real estate developer in a calendar year. Booking value grew 69 per cent to Rs 28,800 crore from sale of 26.38 million square feet of area, a volume growth of 54 per cent.

The company highlighted that the Delhi-NCR market contributed maximum pre-sales in the last calendar year at Rs 9,936 crore followed by Mumbai Metropolitan Region (MMR) Rs 9,177 crore and Bengaluru (Rs 5,303 crore).

Talking about this fiscal year, Pirojsha exuded confidence that the company would be able to meet the sales bookings guidance of Rs 27,000 crore for this full fiscal year as against Rs 22,527 crore in 2023-24.

Already, the company has clocked pre-sales of Rs 19,281 crore in the first nine months of this fiscal as against Rs 13,008 crore in the year-ago period.

To expand business amid strong demand, Godrej Properties acquired 12 land parcels during the April-December period this fiscal to develop housing projects worth Rs 23,450 crore, and plans to buy more in the ongoing quarter.

For new business development, Godrej Properties acquires land outright and also partners with landowners.

Asked about future land acquisition, Pirojsha said the pipeline is very strong and the company is in discussion with landowners across multiple cities.

"We raised Rs 6,000 crore through Qualified Institutional Placement (QIP) in the December quarter. The fundraise has given a good solidity to the balance sheet and a good ability to invest for growth," said Pirojsha.

In group housing segment, the company has a significant presence in MMR, Pune, Delhi-NCR and Bengaluru. It recently entered Hyderabad. For plotted developments, Godrej Properties has ventured into tier II cities as well.