Housing Sales Hit Nine-Year High In 2022 Despite Rising Rates: Knight Frank
Housing sales were at a nine-year high in 2022 despite steep policy rate hikes and subsequent rise in home loan rates.
In 2022, residential sales clocked a nine-year high despite higher home loan rates and office leasing reported the second highest transactions since 2019, according to Knight Frank India.
Sales as well as launches indicated healthy growth across eight major cities—Mumbai, NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad—covered in the 'India Real Estate: 2022' report, released on Tuesday.
"For the first time in over a decade, we have seen simultaneous growth in all major real estate segments," Shishir Baijal, chairman and managing director at the real estate consultancy firm, said in the report.
Office, residential, warehousing and retail registered significant increase in activities last year, according to Baijal.
"Factors like change in attitude towards home ownership, return to work and increased hiring, and proliferation of e-commerce, etc., backed by economic stability, allowed India's real estate sector to benefit last year," he said.
Housing sales were at a nine-year high despite steep policy rate hikes and subsequent rise in home loan rates that punctuated 2022, the report highlighted.
Around 3.13 lakh residential units were sold across the country, up 34% year-on-year and the highest in nine years.
The major cities, barring Kolkata, registered double-digit growth during the year.
Mumbai remained the largest real-estate market in the country with 85,169 units sold, followed by NCR at 58,460 units, and Bengaluru at 53,363 units.
The momentum in sales was matched by new launches, which grew 41% annually to 3.28 lakh units.
Mumbai again topped the list with 90,434 launches (29% growth on-year), while Delhi registered a 207% rise in new launches at 63,233 units.
Residential markets saw a marginal sequential decline in volumes, as the Reserve Bank of India joined its global peers to raise policy rates, making mortgages more expensive, Knight Frank said.
Housing prices increased in the range of 4-7% across the eight cities, compared with the past 12 months, the real estate consultancy said in its report.
"This pace of growth is expected to largely remain in the new year owing to continued domestic economic growth," Baijal said.
Second Best Year For Office Market
The office market, which saw sales dry up significantly during the pandemic years, has recovered despite concerns of a looming recession in developed economies, Baijal said.
While stronger domestic economy propped up the office market in the December quarter, more corporations pushing for return-to-work has kept demand steadily rising in the segment.
In 2022, office transactions saw their second-best year since 2019, with gross leasing activities of 51.6 million square feet, higher by 36% over the previous year, Knight Frank said.
Bengaluru clocked the highest office space sales at 14.5 million square feet, a growth of 19% year-on-year.
Ahmedabad recorded the biggest jump in office space transactions at 88%, covering 2.2 million square feet, followed by Mumbai at 69% growth covering 6.4 million square feet.
Baijal said the "occupiers" increasingly favoured flexibility, which in turn has helped managed office spaces to record substantial growth in 2022.
"The uncertainty in the global economies is expected to continue for a couple of more quarters, which can cause sentiments to remain subdued, while corporations work towards realigning around the same, post which we can expect an uptick in leasing activities," he said.
According to him, the domestic economy is expected to remain "in growth mode", which should help office spaces maintain momentum.
