Real estate recovery across India's top seven cities is becoming “entrenched”, according to Morgan Stanley.
Pre-sales and new launches for Q4 of 2021 were the highest in the last five to six years, exceeding pre-Covid levels for the first time, the financial services provider said in a March 14 report. “This can continue for a while if pricing remains disciplined.”
Residential demand, it said, is strong in both affordable and premium segments, driven largely by better affordability, cycle-low mortgage rates, trailing five to six years of low volumes, wealth effect and upgrade requirement.
Price increases/discount removals have begun across cities and developers, the report said. In commercial, vacancies are peaking in the mid-teens, which should drop in the second half of 2022 with new leasing, “driven by solid employee/business expansion for MNC tenants”.
In the residential segment, new launches rose 40% quarter-on-quarter to 44,500 units. That compares with the six-quarter average of about 28,700 units, and is driven by Bengaluru, Kolkata, Gurugram, Pune and Chennai, according to the report. New sales rose 41% to around 41,200 units, driven by growth across all cities.
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