Record Presales in Q2, New Launches to Fuel Momentum in Q3
By Bricksnwall | 2023-10-24
In terms of
micro markets, the top six cities are projected to continue to consolidate,
with Bengaluru, MMR, and Pune experiencing significant volume-driven growth,
while NCR's growth will mostly be fueled by stronger price appreciation in the
a report by HDFC Securities, real estate developers are reporting record
presales in what would otherwise be the seasonally weakest quarter. This trend
is anticipated to continue in the next quarter as fresh launches multiply the
presales. "Within micro-markets, we estimate that the trend towards
consolidation will continue in the top six cities, with Bengaluru, MMR, and
Pune witnessing strong volume-driven growth, while NCR growth will mostly be
fueled by price rises.
higher price appreciation in the luxury segment," analysts at HDFC
Securities said while announcing that geographical diversification is likely to
continue with growth in presales from the non-core market. It also stated that
the increase in launches and more supply would maintain a stable average price
and middle-income housing could be negatively impacted by a higher mortgage
rate, but the demand for luxury homes is unlikely to change because the luxury
market is driven by the wealth effect. There is a greater lean toward premium
projects as evidenced by the most recent GDV addition by developers like
Prestige, Godrej, and Microtech."We are seeing higher presales growth from
the premium real estate segment, which is resulting in higher average price
realization for developers," the research continued for the NCR and
HDFC Securities research, significant IT businesses have ordered their
employees to get back to work; therefore, by March 2024, physical occupancy is
anticipated to rise from 45?50% to 70%. Since COVID, these organizations have
had a turnover rate, and a sizable portion of the workforce is currently made
up of freshmen.
together and learning are both necessary. According to the analysis, the rise in
physical occupancy will prompt quicker lease termination decisions and a
hardening of office rental rates.
In terms of
malls, HDFC Securities anticipates that as individuals look for other ways to
spend money?such as on hospitality, travel, etc.?consumption weariness will
become more pronounced. Growth will be fueled by the impending holiday season
before it slows down towards the end of 2HFY24.
We observed intensified business development initiatives from leading developers in FY23. Godrej exceeded their prediction of Rs 150 billion by adding GDV in the amount of Rs 320 billion in FY23. Macrotech increased GDV in FY23 by Rs 198 billion, exceeding the BD forecast of Rs 150 billion. With a significant GDV addition of Rs 143 billion by Macrotech during H1FY24 (or 80% of the FY24 forecast), we have observed positive BD activity. We anticipate our coverage universe to add a new land bank during FY24, according to HDFC Securities. Organized firms are better positioned to add new BD and increase market share due to their solid balance sheets, low cost of capital, and strong brands.