Presenting a stable outlook for the residential real estate sector in financial year 2024-25, credit rating agency ICRA Limited on August 7 said that housing sales across the country’s top cities - Mumbai Metropolitan Region, National Capital Region , Bengaluru , Hyderabad , Pune, Kolkata and Chennai - are expected to witness double digit growth in 2024-2025. According to ICRA, the area for sale is expected to increase by 12-14% annually to 785-800 million square feet in FY25 supported by strong end-user demand and healthy, albeit moderating affordability. The average property prices are expected to rise by 5-6% during the ongoing fiscal, against 11% year-on-year in FY24, as per the agency’s estimates.
“This is driven by a change in the product mix with a higher share of luxury units and pricing flexibility arising out of healthy sales and the resultant lower inventory overhang,” said Anupama Reddy, co-group head and vice president - Corporate Ratings, ICRA. ICRA also noted that demand for real estate ownership is in play across Tier II markets, with trends similar to those seen in metro cities, particularly with regard to an inclination towards premiumisation, and that several branded developers are evaluating prospects in Tier II cities. It also highlighted that housing sales are currently largely happening in the under-construction portfolio.
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