Business Business: Rating firm Information and Credit Rating Agency (ICRA) expects residential sales to grow 10-12 per cent in FY25 across the top seven cities, driven by strong end-user demand and healthy, albeit moderate, affordability. Despite a moderation in sales growth rates, overall sales velocity, collections and inventory position are projected to remain healthy, the rating firm said in a statement. The top seven cities are Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru, Hyderabad, Pune, Kolkata and Chennai. Launches across the top seven cities are expected to grow 12 per cent year-on-year (Y-o-Y) in FY25 on an overall basis, supported by low inventory over the decade, comfortable years of sales (YTS) and healthy demand. Anupama Reddy, Co-Group Head and Vice President, Corporate Ratings, ICRA, said, “With robust sales and low leverage, the dream era continues for residential real estate players. Residential sales witnessed a healthy growth of 19 per cent year-on-year in FY24.
Despite high home loan interest rates and rising property prices
sales consistently hit new peaks in each quarter over the last eight quarters (except Q1 FY24 and Q1 FY25, as the first quarters traditionally lag). Q1 FY25 saw a moderate growth of 7 per cent year-on-year in the sold sector across the top seven cities due to lower launches, which have been deferred to subsequent quarters.” Meanwhile, gross loans are expected to grow by 6-7 per cent in FY25, driven by growth in construction finance loans due to a pick-up in new business development and project execution. Speaking about the future outlook of the sector, Reddy said, “Average selling price (ASP) grew 11 per cent year-on-year in FY24 and is expected to grow further by 5-6 per cent in FY25. This is due to a shift in product mix, with luxury units having a higher share and pricing flexibility arising from healthy sales and consequent low inventory overhang. Given the desire for larger spaces and changing consumer demand driven by the pandemic, developers have re-arranged their launches accordingly. Leverage is projected to remain comfortable till March 2025, even with an expected increase in gross debt levels, supported by healthy cash flows. The outlook on the residential real estate sector is stable.”Residential sales expected to grow by double digits across top cities
