Indian Residential Real Estate Market Set for Double-Digit Growth in FY25
Residential sales in top 7 Indian cities to witness double-digit growth in FY25, driven by strong end-user demand and healthy affordability.
Indian Residential Real Estate MarketDouble Digit GrowthFy25IcraCredit Rating AgencyReal Estate NewsAug 07, 2024
The residential sales witnessed a healthy growth of 19 percent in FY24 (year-on-year). Credit rating agency ICRA said it expects the area sold in the top seven cities to increase by 10-12 percent to 785-800 million square feet in FY2025, on a high base of FY2024.
Despite the moderation in the sales growth rate, the overall sales velocity, collections, and inventory position are estimated to remain healthy. The launches are expected to rise by 12 percent in year-on-year (YoY) terms to 767 million square feet in FY2025, on an aggregate basis across the top seven cities.
“With epic sales and low leverage, the dream run continues for residential real estate players. The sales consistently reached new peaks in each successive quarter over the past eight quarters (except Q1 FY2024 and Q1 FY2025) despite elevated home loan interest rates and rising property prices,” said Anupama Reddy, Co-Group Head and Vice President -Corporate Ratings, ICRA.
The area sold in the top seven cities in Q1 FY2025 witnessed moderate growth of 7 percent YoY due to lower launches, which are deferred to subsequent quarters. The average sale price (ASP) rose by 11 percent in FY2024 on a YoY basis and is expected to further increase by 5-6 percent in FY2025.
“Given the pandemic-induced desire for larger spaces and changing consumer demand, the developers have accordingly realigned their launches. Leverage is estimated to remain comfortable as of March 2025 despite the expected increase in gross debt levels, supported by healthy cash flows. The outlook on the residential real estate sector is stable,” explained Reddy.
ICRA is a credit rating agency that provides independent and unbiased opinions on the creditworthiness of companies and their debt obligations.
Frequently Asked Questions
What is the expected growth rate of residential sales in the top 7 Indian cities in FY25?
10-12 percent
What is the factor driving the growth of residential sales in the top 7 Indian cities?
Strong end-user demand and healthy affordability
What is the expected increase in launches in FY25?
12 percent
What is the outlook on the residential real estate sector according to ICRA?
Stable
What is the expected change in average sale price (ASP) in FY25?
5-6 percent increase
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