The metros dominated the residential real estate market in calendar year 2022 over other regions, and by a huge margin, according to a report by real estate consultancy, PropEquity.
The sales of residential property in tier-I cities was 250 per cent higher than in tier-II cities, while the supply of new units was higher by 240 per cent, the report said.
“The total absorption witnessed in tier-I cities was a whopping 453,000 units as against 183,000 units in tier-II cities. The number of new launches in the metros stood at 371,000 units as against 152,000 units in the tier-II cities,” the report said.
The survey was carried across 40 cities in India.
Findings revealed that in terms of supply of new units and projects, the top 20 per cent of the cities saw more than 80 per cent of the new supply in calendar year 2022.
“If the value (prices) of homes is taken into consideration, then the market share of residential real estate in tier-I cities came to four time than that of tier-II cities,” the report said.
According to the report, CY 2022 also saw the highest launches and absorption in the last eight years, with absorption crossing 450,000 residential units with only 370,000 new supply in the same period.
“In all, 2022 has witnessed maximum residential property sales in the last eight years, with total absorption increasing by 28 per cent year-on-year. These higher sales were a result of multiple factors such as increased confidence of consumers on hard assets compared to volatile assets post-COVID and lower repo rates of 4 per cent in the first half of 2022, increasing the borrowing and lending capacity of commercial lenders because of lowered cost of credit and the increase of liquidity in the financial system,” the report said.
At present, inventory overhang is at all-time low in the top tier-I cities with only 12 months of inventory left.
“This gap in inventory will encourage developers to launch new projects in the coming quarters to cater to the existing demand,” the report said.
Samir Jasuja, founder and managing director, PropEquity, said in a statement: “This disproportion in metros and tier-II cities is due to employment opportunities, and better infrastructure with better standard of living in tier-I cities. Regardless of size of the real estate industry in the two categories of cities, there are very positive developments and all-round growth of property market across the country where more and more people are finding a home of their choice and within their budgets.
These are healthy signs of a mature real estate in any country.”
Ankush Kaul, chief business officer – Ambience Group, said in a statement, “This growth is not only a sign of economic prosperity, but also a reflection of the trust and confidence people have in the future.”