Residential Real Estate in India to Grow by 18% in FY25, Says JM Financial
New Delhi, India – The outlook for residential real estate in India is strong for the financial year 2025 (FY25), according to JM Financial. The domestic residential market performed exceptionally well in FY24, and the market is expected to grow by 18% in FY25. This growth includes a 12% increase in the number of units sold and a 6% rise in prices.
In FY24, the market reached its highest-ever absorption rate, with pan-India absorption rising by approximately 20.1% year-on-year (YoY) and supply increasing by about 11.5% YoY. As a result, inventory levels in cities dropped to a record low of 12 months. The sector also recorded an average YoY price increase of 9.0%, indicating an overall market growth of 29%.
Pre-sales for listed companies grew by 39.5% YoY, showing that market share gains continue for listed and Tier 1 developers. The report noted that with historically low inventory levels, increasing disposable income, and limited supply expansion, the residential real estate sector is set to continue its upward trajectory.
JM Financial expects supply to grow steadily, maintaining healthy inventory levels due to robust absorption and buoyant demand. Developers are likely to prioritize business development over deleveraging, with substantial growth in cash flows anticipated.
FY24 was a record year for absorption across residential real estate, with pan-India sales crossing a billion square feet. Since FY21, pre-sales in the top 7 markets have largely been ahead of new launches, leading to a sharp reduction in inventory levels to 11 months.
Listed players like Godrej, Prestige, Signature, and Brigade showed strong growth in FY24. Real estate companies are diversifying into new micro markets to reduce dependence on core regions and capture growth opportunities. There is a growing preference for branded and high-end products, with Tier 1 developers gaining market share from the fragmented informal segment of the industry.
In Tier I cities, the demand for luxury properties has grown significantly since FY22. Post-Covid, there is an increasing preference for spacious, well-equipped residences that cater to remote work needs and offer enhanced security features.
Doubts Revealed
Residential Real Estate -: This means houses and apartments where people live. It does not include shops or offices.
FY25 -: FY25 stands for the financial year 2025. In India, a financial year starts on April 1st and ends on March 31st of the next year.
JM Financial -: JM Financial is a company that provides financial services like investment advice and market research.
Absorption rate -: This is a term used in real estate to show how quickly homes are being sold in a market.
Inventory levels -: This means the number of unsold homes available in the market. If it drops, it means more homes are being sold.
Pre-sales -: Pre-sales are homes that are sold before they are built. People buy them based on plans and models.
Branded, high-end properties -: These are homes built by well-known companies and are usually more expensive and luxurious.
Diversification into new markets -: This means that builders are starting to build homes in new areas or cities where they did not build before.
