India Set for Major Residential Project Launches in Q1 2025, Mid-Income Housing to Take the Spotlight: HSBC

New Delhi, Dec 11 (NationPress) India is on the brink of experiencing significant residential project launches in the initial quarter of 2025, fueled by a strong demand for upgrades in the premium sector. According to a Wednesday report by HSBC Global Research, developers will need to adjust their strategies to emphasize more mid-income housing as the luxury market stabilizes at a high baseline.

The previous four years have been characterized by a substantial upgrade demand, enabling developers to secure improved pricing.

HSBC noted, "We believe that the increasing preference for high-rise buildings within the Indian economy has expanded the market opportunities for developers."

In the first quarter, developers are expected to undertake significant launches to align with their FY25 pre-sales targets. Throughout the year, "we anticipate a shift in demand towards mid-income housing, which will affect sales values and profit margins," the report stated, highlighting that the advantages seen in the upper-income category will gradually benefit the mid-income sector.

Over the last four years (2021-2024), there has been a notable increase in residential real estate pre-sales volumes and values, achieving compound annual growth rates (CAGRs) of 18% and 31%, respectively.

"We still foresee growth in 2025, despite 2024 experiencing fewer launches, but the high baseline will start to influence the growth rate," the report added.

The limited unsold inventory is unlikely to exert downward pressure on pricing, which is crucial for maintaining pre-sales momentum.

"Following three years of strong performance, we expect some base effect to begin manifesting in sales momentum," the report concluded.

Real estate stocks are often more responsive to interest rate fluctuations and could gain from potential rate cuts in 2025.

"We anticipate that investors will prioritize companies' capabilities to sustainably scale their operations through new launches and by enhancing collection rates and operating cash flow," the report noted.

Overall, HSBC Global Research projects a resurgence in launch momentum as approval processes are streamlined, fostering sales growth in 2025.