New Delhi [India], September 6: According to JM Financial, the outlook for the residential real estate market in financial year (FY25) remains strong, building on the exceptional performance of FY24.
The forecast for FY25 predicts an 18 percent market growth, driven by a 12 percent increase in the number of units sold and a 6 percent rise in prices. The report also anticipates a moderate increase in supply to align with the demand for new purchases throughout the year.
The domestic residential market excelled in FY24, achieving its highest-ever absorption rate. Nationwide absorption increased by about 20.1 percent year-over-year (YoY) based on the area absorbed, while supply grew by approximately 11.5 percent YoY. This led to a record-low inventory level of 12 months in various cities.
The sector saw an average YoY price increase of 9.0 percent, reflecting a total market growth of 29 percent. Pre-sales for listed companies also grew by 39.5 percent YoY, showing continued market share gains for Tier 1 developers.
The report highlights that historically low inventory levels, rising disposable income, and limited supply expansion are set to sustain the upward trend in the residential real estate sector. It notes that while supply is expected to increase gradually, inventory levels should remain healthy due to strong absorption rates.
FY24 was marked by unprecedented absorption levels in residential real estate, with pan-India sales surpassing one billion square feet. Since FY21, pre-sales in the top seven markets have consistently outpaced new launches, resulting in a significant reduction in inventory levels to 11 months. Among listed developers, companies such as Godrej, Prestige, Signature, and Brigade reported notable growth in FY24.
The report also observes that real estate companies are diversifying into new micro-markets to mitigate reliance on core regions and capture emerging growth opportunities. With an increased preference for branded and high-end products, Tier 1 developers are targeting market share from the fragmented informal sector. Data from Propequity indicates that the top 10 publicly listed developers have increased their market share by approximately 8 percentage points since 2019.
In Tier I cities, demand for luxury properties has surged since FY22, with a growing preference for spacious, well-equipped residences that accommodate remote work and offer enhanced security features.
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