India's Top Cities Real Estate Market Sees 9 Decline in Sales 2024

The residential real estate market in India’s top nine cities witnessed a notable shift in 2024, with sales dipping by 9%, reflecting 470,899 units sold, compared to the 514,820 units in 2023. Meanwhile, the supply of new homes saw a 15% decline, dropping to 411,022 units in 2024 from 481,724 units the previous year. This decline is largely attributed to the general elections and the monsoon season, which resulted in two quarters of reduced activity across the country.

Despite these declines, the supply to absorption ratio remained stable, a positive sign that indicates the market's strong fundamentals and suggests that demand continues to support current levels of activity.

Hyderabad's Struggles and Delhi-NCR's Growth

While overall sales were down, the real estate landscape was not uniform across the cities. Hyderabad, in particular, struggled significantly, experiencing the highest decline in both sales and supply. On the other hand, the Delhi-NCR region showed notable resilience, recording substantial growth in both new supply and housing sales.

Interestingly, Navi Mumbai saw housing sales rise, positioning it as the exception in the market's overall decline. The city's growth suggests a regional demand shift, potentially influenced by factors like infrastructure developments and improved connectivity.

A Mixed Performance Across Cities

Breaking down the performance city by city, four out of nine cities recorded an increase in new supply, with Delhi-NCR leading the charge. In contrast, Hyderabad showed the most significant challenges, registering the largest decline in both supply and sales.

In Bengaluru, Chennai, and Delhi-NCR, new supply surpassed the absorption rate, indicating that while supply was robust, demand faced challenges in certain pockets. Developers in these regions seemed cautious, possibly adjusting their strategies to meet the demand while keeping supply balanced.

What’s Driving the Decline?

The drop in sales and new supply in 2024, despite a strong 2023, can be attributed to the high base effect—2023 was a peak year for the industry, which makes 2024’s numbers seem even more pronounced. However, the stability of the supply to absorption ratio offers optimism for the future, indicating that the market remains fundamentally sound despite these setbacks.

As the market looks ahead, experts point out that weak demand may have encouraged developers to slow down the pace of new launches, focusing on meeting the existing demand instead of ramping up supply too quickly.

Looking Ahead: A Balanced Outlook

Despite a slight dip in sales and new supply in 2024, India’s real estate market remains a dynamic space. As cities like Delhi-NCR continue to thrive and Hyderabad works through its challenges, the market is expected to adapt, with developers keen on striking the right balance between demand and supply.