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Resale property market booms amid price hikes, scarcity of ready homes

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Resale or nearing completion residential property sales are booming as demand outpaces market supply, with prospective buyers increasingly viewing the resale market as a viable alternative.

Factors contributing to this trend include a scarcity of newly constructed properties ready for immediate occupancy, a dearth of new developments, and escalating price hikes in major markets.

“Recently, there has been a notable surge in the demand for resale residential properties across cities. This scarcity is due to delays in construction projects and a lack of new developments. Consequently, prospective buyers in urgent need of housing are increasingly looking towards the resale market as a practical alternative,” said Saurabh Garg, co-founder and Chief Business Officer NoBroker, the first brokerage free prop-tech startup that connects homebuyers to owners.

The need for ready-to-move-in apartments has doubled in the last six months, with inventory drying up across major markets.

According to NoBroker, buyers, particularly in cities like Bangalore, Mumbai, Pune, and others, are actively seeking 3BHK and larger properties. These buyers are specifically interested in spacious homes that can accommodate two workstations, study rooms, and recreational areas like patios.

“Home buyers who purchased properties 3-4 years ago are now getting delivery of their assets. This is leading to a secondary supply uptick as investors are now getting an opportunity to exit a ready asset at good prices. Also, typically volume drops if prices move up. Still, this time the situation is defying micro-economic fundamentals, and the market continues to see an uptick in demand,” said Vyoma Pandit, cofounder of Flow Realty India.Resale properties often present a cost and carpet area advantage, as they are commonly priced lower than newly constructed properties. This affordability factor makes resale homes an appealing option for budget-conscious buyers who are seeking maximum value for their investment.

“Bigger carpet areas in resale units, lower prices of 15-30% for resale units compared to new launches are also driving the demand,” said Garg.

Industry experts reveal that apartments in the price range of Rs 1 crore to Rs 1.5 crore have experienced a remarkable 67% year-on-year sales growth in the first half of 2023. In addition, their market share has risen from 14% in the first half of 2022 to 19% in the first half of 2023.

Bengaluru has witnessed the most significant appreciation in property prices, with an average rate increase of 10% over the past year. Pune and Ahmedabad closely follow this trend, with average property rates rising by 8% and 7% respectively in these markets.

“We have seen a sharp price rise in new launches over the last year with an average base price of Rs 7500 as compared to Rs 5400 earlier for Grade-A builders in Bangalore,” said Ashish Acharya, founder of Propsoch, a property research firm.

According to industry estimates, the residential market continued its upward trajectory in the first six months of 2023, with sales of over 126,500 units recorded in H1 2023, marking a 21% year-on-year increase.

The larger markets of Mumbai and Bengaluru led the half-yearly sales, contributing 21% each of the total.

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