India sees demand for property worth over ₹1 cr drive record real estate sales

India sees demand for property worth over ₹1 cr drive record real estate sales
  • Properties priced over ₹1 crore see 39% Y-o-Y increase in sales.
  • The affordable segment, comprising homes priced below ₹50 lakh, sees a 10% Y-o-Y decline.
  • India's top eight markets report strong transactions in the office space market.
The top eight residential markets in the country have continued to display robust growth, in the period Q3 2023 (July-September). During this period, there was a strong surge in demand, with sales of 82,612 residential units, marking a 12% year-on-year (Y-oY) growth. In terms of volume, Q3 2023 achieved the highest quarterly sales in six years, as per Knight Frank India's latest report on the Indian real estate market.

The mid and high-end categories of residential properties experienced increased sales momentum in this period. Properties priced over ₹1 core saw a 39% Y-o-Y increase, while the mid-segment, ranging from ₹50 lakh to ₹1 crore, witnessed a 14% year-on-year rise.

However, the affordable segment, comprising homes priced below ₹50 lakh, saw a 10% Y-o-Y decline, totaling 24,143 units.

City-wise Ticket Size Demand Analysis (Q3 2023)
< ₹50 lakh ₹50 lakh- ₹1 crore ₹1 crore >
CitySales in unitsCitySales in unitsCitySales in units
Total24,143 29,827 28,642

Source: Knight Frank India

Prices rise with growing demand

Developers have responded to this surging demand by launching new projects, with 85,549 new residential units introduced in Q3 2023, representing a 23% year-on-year increase. Prices in various markets across India also rose in line with the growing demand, with Hyderabad experiencing the most significant price hike at 11% year-on-year, mainly driven by a focus on premium properties.

Average price change across markets during Q3 2023
MarketPrice/sq ftY-o-Y ChangeQ-o-Q Change
Source: Knight FrankIndia

Says Shishir Baijal, chairman and managing Director, Knight Frank India, "Residential sales continue to gain momentum, reaching multi-year highs. Although inventory levels have seen a significant rise due to developers launching projects to cater to this robust demand, the overall market health is improving, with strong sales velocity. Elevated interest rates and prices have had little impact on higher-ticket-size homebuyers, but the affordable segment has been severely affected, necessitating further interventions to stimulate demand and enhance development viability."

Office space uptake goes up 17% Y-o-Y, Mumbai the most active market

Meanwhile, in Q3 2023, India's top eight markets reported strong transactions in the office space market, totaling 16.1 million square feet, marking a 17% Y-o-Y growth. This reflects occupiers' confidence in India's stable economy amid global uncertainties. Global corporations displayed a strong commitment to their India operations, constituting 44% of office transactions, primarily through Global Capability Centres (GCC). India-facing businesses and domestic corporations also played a significant role, contributing to 37% of transactions, totaling 6 mn sq ft.

Mumbai was the most active office market during Q3 2023, with 3.2 million square feet of transactions, representing 20% of the total. New office completions reached 11.5 million square, led by Hyderabad (46%) and Bengaluru (35%). Mumbai had the highest office rental rates at ₹113/square feet/month, while Kolkata saw the highest rental appreciation of 10% during the quarter.