The three south cities have an edge and high scope for future growth.

Anuj Puri, Chairman, ANAROCK Group

How is the performance of real estate market of the southern part of the country this year?

As per ANAROCK Research, the southern cities - Bengaluru, Hyderabad & Chennai - recorded total housing sales of nearly 69,920 units in H1 2023, which is nearly 31% of the total units sold across the top seven cities altogether. The total sales in H1 2023 in the three cities jumped up by 20% against the corresponding period in 2022.

In terms of new supply, the three cities collectively added approx. 61,530 units in H1 2023, comprising nearly 29% share of the overall new launches across the top seven cities in the period. If we look back at the year ago period, there has been a 9% decline in overall new supply in H1 2023 as against H1 2022. Approx. 61,530 units have been launched in H1 2023 while back in H1 2022 nearly 67,580 units were launched in these three cities altogether. Developers have been conscious in bringing in new supply, particularly in Hyderabad which saw significant new launches in 2022 period.

How is the demand picking up for residential, commercial, affordable and luxury real estate projects in India's southern markets?

As mentioned above, if we consider residential trends in the three south cites, demand remains high across all cities. As for budget segments, mid-segment priced within Rs 40 lakh to Rs 80 lakh has been the top in demand comprising nearly 36% share of the total sales seen in three cities in H1 2023. Interestingly, affordable segment priced <Rs 40 lakh saw the least demand with just 8% share of total sales. Premium segment comprised nearly 30% share of the total sales, followed by luxury segment priced >Rs 1.5 CR comprised 25% share.  

How far the infrastructure developments are influencing the real estate market growth in the southern region?

Just as in any city, infrastructure has played a significant role in influencing the real estate markets in these cities as well. Be it metro project or the peripheral ring roads or any other project, the real estate markets in and around these projects have benefitted immensely over the years. For instance, Metro Phase 2 & 3 project in Bengaluru has significantly impacted markets such as K R Puram, Marathahalli area, among others and has helped prices appreciate more than 20% in the last 4-5 years.

How do you look at the overall market outlook of the region? What could be the trends to look for in the coming years?

Considering that the three southern markets are driven largely by the IT/ITeS sectors, we may continue to see high demand in both residential and commercial sectors. The fact that all three markets continue to be affordable in comparison to major hotspots like NCR and MMR, the three south cities have an edge and high scope for future growth. Moreover, current trends indicate a positive outlook for all three markets with Bengaluru and Hyderabad staying on top.

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