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New Delhi (India), November 3 (ANI): India’s residential real estate sector has seen a strong surge in recent years with the top 15 listed developers reporting a compound annual growth rate (CAGR) of 43 percent in pre-sales. It will reach Rs 1.2 trillion from fiscal year 2021 to FY24, according to a report by Axis Capital.

Between FY21 and FY24, developers scaled up their established market, which accounted for much of the growth observed, the report said.

About 80 percent of this growth came from existing markets, representing a 36 percent CAGR, with demand particularly strong in the seven largest cities, which saw value growth of 41 percent.

“As demand has increased, most companies have initially focused on expanding their presence in existing markets while building pipelines outside their home market,” the report said.

Leading developers including DLF, Oberoi and Sunteck reported higher investments in new projects in their core regions – National Capital Region (NCR) and Mumbai Metropolitan Region (MMR). Some companies like LODHA and Prestige Estates have ventured beyond their traditional strongholds to Pune, Bangalore and MMR.

Axis Capital noted that the enactment of the Real Estate (Regulation and Development) Act (RERA) has also helped developers expand beyond their home markets and many of them have also achieved success.

“Most of the top 15 listed players have invested in markets outside their existing core markets and added about 130 million sq ft of projects worth Rs 1.75 trillion in FY22-24, 10 times their contribution to pre-sales by FY24 in these new markets,” the company said. report added.

Despite the recent slowdown in absorption rates due to the rise in premium and luxury housing options, demand for residential real estate will remain stable, supported by wider choice and stronger positioning of branded developers, the report said.

The pace of absorption is expected to stabilize and increased supply will drive growth, the report said. The sector is projected to achieve a CAGR of 24 per cent in pre-sales between FY24 and FY26, it added.

In terms of supply dynamics, developer participation has grown by 29 percent since calendar year 2020, especially in MMR and Hyderabad. However, regions like NCR and Bengaluru are seeing a slight decline. Record transaction volumes are being recorded across the top seven cities, with MMR, Pune and Hyderabad seeing absorption rates four times higher than the previous peak, while markets such as Bengaluru and Chennai are expected to see further potential as supply constraints ease.

With new supply expected in previously limited regions such as Noida in NCR and key zones in Bengaluru and Chennai, the report expects growth across the sector to remain robust, with a potential increase of 5-10 percent over the next two to three months. years. (ANI)

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