Housing sales in top tier-II cities slip 13% in Q3 2024

Bengaluru: Housing sales in the top 30 tier-II cities declined by 13% in the July to September quarter (Q3) this year while launches fell 34% in the same period, according to a report by real estate data analytics firm PropEquity out on Monday.

Housing sales fell to 41,871 units in Q3 2024 against 47,985 units in the same period last year while launches fell to 28,980 units in July-September quarter of 2024 from 43,748 units, the report said.

However, the overall real estate sector is still seeing a glut of investment. In Q3, foreign investors infused $436 million marking a 139 per cent year-on-year increase, reported Vestian on Monday. Most of the investment was in commercial and office space deals.

Meanwhile, as per PropEquity, tier-II cities in the west zone (Ahmedabad, Vadodara, Gandhinagar, Surat, Goa, Nashik and Nagpur), contributed 72 per cent to the total sales and 71 per cent of total launches in Q3. Ahmedabad alone accounted for 32 per cent of the total launches and 30 per cent of total sales.

“The decline in sales and launches is on account of higher base effect as year 2023 had recorded historic highs,” said Samir Jasuja, CEO and founder, PropEquity.

The cities that witnessed maximum drop in launches were Sonepat, Panipat and Agra. Only eight cities saw growth in new launches including Bhopal, Dehradun, and Coimbatore.

Another survey out on Monday revealed that 53 per cent of affordable housing buyers were unhappy with available options in the first half (H1) of 2024.

Major deterrents for buyers in this segment were low-quality construction and poor design, bad project location accessibility, and constricted unit sizes, according to the survey by ANAROCK and FICCI.

Along with demand, affordable housing supply in major cities also dropped to 17 per cent of new projects in 2024 compared to 40 per cent in 2019.

In Chennai, Hyderabad, Delhi-NCR, and Bengaluru, over 50 per cent respondents preferred 3BHKs over other flat sizes, while over 40 per cent participants in Kolkata, Mumbai and Pune preferred 2BHKs.

The demand ratio of ready-to-move-in homes to new launches stands at 20:25, showing a trend reversal. In H1 2020, the RTM-to-new launches demand ratio was 46:18. This is because most homebuyers favour projects by large developers who they are confident will deliver their homes on time.

Real estate is the most preferred asset class for investment for over 59 per cent respondents, up 2 per cent against the pre-pandemic survey.