Backed by strong demand from a new generation of double-income, younger crop of buyers besides NRIs, real estate major DLF Ltd will look at high margin projects. The company is also “on course” to “surpass” its bookings guidance of ₹13,000 crore for FY24.

The company turned net debt positive earlier this year. And according to Aakash Ohri, Joint Managing Director and Chief Business Officer, DLF, the cash surplus would now help the company tap “high margin projects”. 

Changing demography

Good residential demand with a “relatively younger buyer base” — the average age now is around 35-40 against 45 years earlier — has seen the company come up with a series of launches, most of which has been “completely sold out”.  

Younger buyers are also open to paying premium on residential projects if they “cater to the requirements”. 

While in the first half of the fiscal, the average sales were around ₹4,200-4,300 crore, launches in Q3 saw the company report sales of nearly ₹9,000 crore. 

Its latest luxury residential development ‘DLF Privana’ - 1,113 residencies across seven towers in Sectors 76 and 77 of Gurugram - was sold out, garnering a turnover of about ₹7,200 crore. DLF clocked ₹15,083 crore of sales in FY23, with nearly ₹8,000 crore coming from The Arbour. 

“We are well on course with the bookings guidance….may be surpass it. Demand is good. And we expect our upcoming launches to do well too,” Ohri told businessline. 

“And now that we are net debt positive, we will continue to look into the high margin projects,” he said. 

New buyers 

Buyers, including new ones, have “prioritised” home-buying making it “among the top three requirements now”. 

“The first-time home buyer is someone who is into his second job or so; is a double-income household. So as this younger crop comes into the market, particularly increasing in numbers post-Covid, we do see a huge opportunity to tap into,” Ohri added. 

New launches are planned in Mumbai, Chennai and Gurugram. “We will look to advance some of our Q1FY25 launches into Q4FY24. There is demand in the market,” he said. 

Although demand continues to be good, Ohri doesn’t see “arbitrary price rise” in the sector any more. Price rise will be “demand and market driven” and continue to be a factor of project specifications, amenities, market demand and buyer interest. 

“Developers are in no position to arbitrarily increase prices. The buyer is smart and very conscious. Plus, we have a crop of young buyers who are very sure of what they want, for what period they want to spread their loans and so on,” he said. 

As per ANAROCK Research, housing prices rose between 10 per cent and 24 per cent, across the top seven cities, primarily due to increased input costs and strong demand. Hyderabad recorded the highest yearly jump of 24 per cent in average residential prices.

NRI outreach 

DLF has also upped its NRI outreach programme.

“Real estate is back to being a stable asset. So people are investing back. And our outreach programmes have done well,” Ohri said. 

Incidentally,  available inventory declined 5 per cent in 2023-end across the top seven cities despite strong new housing supply during the current year. About six lakh units are available for sale across these cities, indicating strong demand. Interestingly, NCR saw the highest decline of 23 per cent in unsold stock on a yearly basis to 94,800 units as of 2023-end. 

Related Topics
comment COMMENT NOW