In the first half of this year, housing sales in eight major cities surged by 60% year-on-year, reaching 1,58,705 units, the highest demand in nine years. Knight Frank India reported these findings in its 17th edition of the half-yearly report, ‘India Real Estate: Residential and Office Market H1 2022,’ released through a webinar on Wednesday. This substantial increase, attributed to a lower base effect and favorable mortgage rates, marks a notable rebound from the 99,416 units sold in the same period of 2021.
Knight Frank India emphasized that the residential sector achieved its highest sales volume in January–June 2022 in nine years, surpassing the previous peak recorded in the first half of 2013 at 1,85,577 units. Factors contributing to the surge include a desire among homebuyers to upgrade their primary lifestyle, low interest rates on home loans, and relatively affordable home prices compared to pre-pandemic levels. The renewed emphasis on homeownership triggered by the COVID-19 pandemic is also a significant driver of increased sales.
Housing prices experienced a year-on-year increase ranging from 3% to 9% across all markets, marking the first time since the second half of 2015 that prices have grown in year-on-year terms across all markets during the first half of 2022.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, noted, “Home buying has witnessed a strong rebound since the advent of the pandemic and continues despite inflationary concerns in the economy.” Breaking down city-wise housing sales, Mumbai saw a 55% rise to 44,200 units, Delhi-NCR experienced a more than two-fold jump to 29,101 units, and Bengaluru witnessed an 80% increase to 26,677 units.
In terms of supply, new launches increased by 56% to 1,60,806 units, compared to 80,566 units in the same period last year. The strong growth in sales velocity led to a modest decline in unsold inventory to 4,40,117 units in H1 2022, with the quarters-to-sell (QTS) level decreasing to 7.8 quarters from 10.9 quarters in the first half of 2021.
Switching focus to the office market, Knight Frank India reported a more than two-fold increase in leasing to 25.3 million square feet in January-June 2022, compared to 12.25 million square feet in the same period last year. This surge indicates the market’s potential amid a declining pandemic and the promise of sustained economic recovery.
Baijal stated, “The robust performance delivered by the office market during H1 2022 has set the tone for 2022,” adding that with the current leasing pace, 2022 is expected to witness volumes close to the peak of 2019 and exceed in the following year. Notably, new completions of office space increased by 61% annually to 24.1 million square feet in H1 2022.
On rental values, Bengaluru and Pune saw the highest annual increases at 13% and 8%, respectively, due to high demand and a shortage of Grade A space. Hyderabad, Mumbai, and NCR experienced moderate increases, while rental values in Chennai, Ahmedabad, and Kolkata remained stable.
