New Delhi: According to a survey released on Wednesday, the residential real estate sector is likely to see sustained growth in the next years, with double-digit sales increases expected in the top seven cities due to robust end-user demand and good affordability.
In FY24, residential sales increased robustly 19% year-over-year.
Based on a strong FY2024 base, credit rating agency ICRA stated that it anticipates a 10–12% rise in the area sold in the top seven cities to 785-800 million square feet in FY2025.
The assessment is that the inventory position, collections, and overall sales velocity are still strong despite the slowdown in the sales growth rate.
On an aggregate basis across the top seven cities, the launches are anticipated to increase by 12% year over year (YoY) to 767 million square feet in FY2025, driven by decadal low inventory, comfortable years-to-sell, and robust demand.
“With epic sales and low leverage, the dream run continues for residential real estate players. The sales consistently reached new peaks in each successive quarter over the past eight quarters (except Q1 FY2024 and Q1 FY2025) despite elevated home loan interest rates and rising property prices,” said Anupama Reddy, Co-Group Head and Vice President – Corporate Ratings, ICRA.
Since fewer launches were made in the first quarter of FY2025 and were postponed to later quarters, the area sold in the top seven cities experienced a sluggish 7% YoY growth.
On a year-over-year basis, the average sale price (ASP) increased by 11% in FY2024 and is predicted to rise by an additional 6%–7% in FY2025.
“Given the pandemic-induced desire for larger spaces and changing consumer demand, the developers have accordingly realigned their launches. Leverage is estimated to remain comfortable as of March 2025 despite the expected increase in gross debt levels, supported by healthy cash flows. The outlook on the residential real estate sector is stable,” explained Reddy.
