Chennai: Housing sales in the top 7 cities have created a new peak in 2023, increasing 31 per cent over the previous year. Affordability Index, the Equated Monthly Instalment to income ratio for households also improved in 2023.
Around 4,76,530 housing units were sold in 2023 in the top 7 cities, against 3,64,870 units in 2022 – 31 per cent increase. Last peak in the decade was seen in 2022, after 2014, when around 3.43 lakh units were sold in the top 7 cities. Hardening property prices and home loan interest rate hikes in early 2023 did not deter sales, said Anarock Group. Mumbai witnessed the highest sales of around 1,53,870 units in 2023, followed by Pune with around 86,680 units.
In terms of supply, around 4,45,770 new units were launched in 2023 against 3,57,640 units in 2022 – growth of 25 per cent. However, new launches in 2023 were lower than the previous peak of 2014 when 5.45 lakh units were launched in top 7 cities. Available inventory decreased by 5 per cent in 2023 over 2022 despite generous new supply during the year.
Demand is likely to remain undeterred in 2024, even with average prices likely to appreciate by 8-10 per cent across the top 7 cities.
Meanwhile, the Affordability Index, the EMI to income ratio for households has improved in 2023 after the brief decline in affordability in 2022. While marginally better than last year, home affordability across cities also significantly improved compared to pre-pandemic year of 2019. Expected moderation in inflation and projected downward trend in interest rates should further improve home affordability in 2024, according to Knight Frank India.
Ahmedabad remains the most affordable housing market in the country with an affordability ratio of 21 per cent, while Kolkata’s ratio is 24 per cent. Mumbai is the only city beyond the affordability threshold of 50 per cent, though there is an improvement of 2 per cent. The National Capital Region, Bangalore and Chennai saw the affordability index improving.
