Metros continue to dominate realty market

Hyderabad: The sales of residential properties in tier-1 cities in the country stood at more than 250 per cent of the levels seen among tier-2 cities in the calendar year 2022. The total absorption witnessed in tier-1 cities was a whopping 4.53 lakh units as against 1.83 lakh units in tier 2 cities, according to a report by real estate consultancy PropEquity.

Even in terms of new launches of residential property, the tier-1 cities outperformed the tier-2 cities by more than 240 per cent in 2022. The new launches seen in metros stood at 3.71-lakh unit mark while it was 1.52 lakh units in the latter. Pareto-distribution or principle is used in various fields, to identify and analyse various social, scientific, geophysical and business phenomena in society.

Pareto distribution is also observed in real-estate market trends in the new launches share of the top 44 cities (tier-1 & tier-2), tracked by PropEquity. In 2022 the market share of top nine cities (20 per cent of 44 cities) witnessed about 80 per cent of new supply. Similar trends can also be identified and used in various business applications and analytics in real estate.

"This disproportion in metros and tier-2 cities is due to employment opportunities, better infrastructure with better standard of living in tier-1 cities. Regardless of size of the real estate industry in the two categories of cities, there are very positive developments and all round growth of property market across the country," said Samir Jasuja, Founder & MD at PropEquity.

"Rapidly rising property sales in tier-1 cities have shown us that despite challenges, perseverance and innovation always win. With an impressive 2.5 times sales figure compared to tier-2 cities, it is a testament to the strength of the market and the tenacity of those involved in the real estate industry," said Ankush Kaul, Chief Business Officer at Ambience Group.

Interestingly, 2022 has witnessed the highest launches and absorption in the last eight years, with absorption crossing 4.5 lakh of residential units with only 3.7 lakh new supply in the same period. Inventory overhang is at all-time low with only 12 months of inventory left in top tier1 cities in India. This will encourage developers to launch new projects in future to cater to the existing demand.

In all, 2022 has witnessed maximum residential property sales in the last eight years, with total absorption increasing by 28 per cent year-on-year. These higher sales were a result of multiple factors such as increased confidence of consumers on hard assets compared to volatile assets post-Covid and lower repo rates of 4 per cent in the first half of 2022.