Housing sales in India’s 8 prime residential markets during 2022 increased 34% to touch a 9-year high mark as demand for residential real estate remained robust in the post-Coronavirus era, says a new report by property brokerage firm Knight Frank.
According to the 18th edition of Knight Frank India’s flagship half yearly report, a total 312,666 homes were sold in these markets in 2022.
“With central banks raising policy rates to fight an inflationary environment, making mortgages increasingly expensive, residential markets around the world have seen volumes taper off after the initial recovery in 2022. However, despite the Reserve Bank of India raising policy rates by a cumulative 225 bps in 2022, residential demand in the country has not only remained resilient but surged to a nine-year high in terms of annual sales in 2022. H2 2022 is second only to H1 2022 in terms of being the half-yearly period with the highest sales in nine years,” the report titled India Real Estate: Residential & Office, July-December 2022 said.
Heightened savings during the lockdowns, relatively little income disruption in the mid and high-income categories and a comparatively strong economic growth outlook have sustained demand in the Indian residential market, it added.
Data show 328,129 new homes were launched in the 8 markets through the court of 2022. 2022 was the first year since 2014 that the volume of units launched has exceeded that of units sold, the report points out.
Sales rise across city; Kolkata only exception
Home sales grew on a YoY basis in all markets, barring for Kolkata. Hyderabad saw the most sales growth at 32% YoY while NCR and Mumbai grew at 24% and 19% YoY, respectively.
While ready inventory remains a strong preference for homebuyers, established developers with a robust execution record are increasingly finding a market for their under-construction inventory.
Prices on the rise…
While sales volumes have been robust in H2 2022, prices have also grown in the range of 4% to 7% across all markets with Bengaluru, NCR, Mumbai and Pune growing by 7% YoY each. This also marks the second consecutive half-yearly period of YoY growth in prices across all markets. Even in sequential terms, prices have either stayed steady or grown across markets during the period.
“Despite global headwinds weighing down on the domestic economy, India has continued to be the fastest growing large economy globally. This is reflected in the robust office and residential demand, and even complemented by relatively strong price growth seen during 2022,” says Knight Frank India CMD Shishir Baijal.
…so is inventory
With the supply of units exceeding that of sales during 2022, the unsold inventory level by the end of the year grew slightly by 4% YoY to 0.45 million units. However, heightened sales in 2022 have pushed down the inventory overhang from 10.2 to 7.2 quarters in H2 2022.
Greater market consolidation
“The industry continues to consolidate with residential developments steadily shifting into the hands of stronger developers who have been able to weather the economic storm created by the pandemic,” says the report.
