The demand for premium wood and decorative Panel products will expect to grow due to robust increase in sale of residential properties in Metros and Tier 1 cities in India. As per report, the year 2023-24 would see the surprise jump in sale of decorative veneers, Premium decorative laminates, Acrylic laminates, high quality premium grade louvers, Solid Surfaces, Wooden Flooring and Façade materials because there is a report of huge sale growth in luxury housing Flats, Villas etc in year 2022.
The sales of residential property in tier-1 cities in the country stood at more than 250% of the levels seen among tier 2 cities in the calendar year 2022. The total absorption witnessed in Tier 01 cities was a whopping 4.53 lakh units as against 1.83 lakh units in tier 2 cities, according to a report by leading 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% 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.
If the value (prices) of homes is taken into consideration, then the market share of residential real estate in Tier 1 cities is four times that of tier 2 cities. As per report, cities such as Thane, Pune, Hyderbad, Ahmedabad, Mumbai, Bengaluru, Navi Mumbai, Vadodara, Chennai, Delhi-NCR etc has reported the highest number of sales of luxury residential flats and villas.
Interestingly, FY 2022 has witnessed the highest launches and absorption in the last eight years, with absorption crossing 4.5 lakhs of residential units with only 3.7 lakhs 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 gap in inventory will encourage developers to launch new projects in the coming quarters 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% 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% in the first half of 2022, increasing the borrowing and lending capacity of commercial lenders because of lowered cost of credit and the increase of liquidity in the financial system.