New Delhi (India), Nov 3 (ANI): India’s residential real estate sector has seen strong growth in recent years, with the top 15 listed developers reporting a compound annual growth rate (CAGR) of 43% in pre-sales. from financial year (FY) 2021 to FY24, reaching Rs 1.2 trillion, according to the Axis Capital report.

Between FY 21 and FY 24, developers expanded into their established market, which drove much of the observed growth, the report said.

Around 80% of this growth was attributed to existing markets, marking a CAGR of 36%, with demand particularly robust in the top seven cities, which saw a 41% increase in value.

“As demand increased, most companies initially focused on expanding into their existing markets while simultaneously building a pipeline outside their home market,” the report said.

Top developers including DLF, Oberoi and Sunteck reported higher contributions from new projects in their core regions, National Capital Region (NCR) and Mumbai Metropolitan Region (MMR). Some companies like LODHA and Prestige Estates have ventured beyond their traditional strongholds in Pune, Bengaluru and MMR.

Axis Capital observed that the introduction of the Real Estate (Regulation and Development) Act (RERA) has also helped developers expand outside their home markets and many have also seen success.

“Most of the top 15 listed players invested in markets outside their existing core markets and added an estimated 130 million square feet of projects worth Rs 1.75 trillion during FY22-24, which is 10 times their pre-sale contribution for FY24 from these new markets,” the report added.

Despite a recent decline in absorption rates due to an increase in premium and luxury housing options, demand for residential real estate will remain steady, supported by wider choice and the stronger positioning of branded developers, the report added.

Absorption rates are expected to stabilize as supply increases, the report added. For FY24-26, the sector is expected to achieve a CAGR of 24% in pre-sales, it added.

In terms of supply dynamics, developer participation increased by 29% from calendar year 2020, especially in MMR and Hyderabad. However, regions like NCR and Bengaluru saw slight declines. Record transaction volumes are being seen across the top seven cities, with MMR, Pune and Hyderabad seeing absorption rates up to four times their previous peak levels, while markets such as Bengaluru and Chennai are expected to see additional potential on as supply constraints ease.

With new supply anticipated in previously supply-constrained areas such as Noida in NCR and key areas in Bengaluru and Chennai, the report expects sector growth to remain robust, with potential increases of 5-10% over the next two to at three. years. (YEAR)

This report is automatically generated by the ANI news service. ThePrint assumes no responsibility for its content.