Demand revival pushed housing sales up 2.5 times in H1CY22, prices up 7%

Housing sales in Delhi-NCR jumped 2.5 fold annually during January-June on revival in demand and lower base effect, while prices rose 7 per cent, according to property consultant Knight Frank India.

In its latest half-yearly report 'India Real Estate: Residential and Office Market H1 2022', the consultant said sales of residential properties rose to 29,101 units in January-June this year from 11,474 units in the corresponding period of 2021.

The sales in first half of 2021 calendar year were hit by the second wave of the COVID-19 pandemic.

New launches of homes jumped multi-fold to 28,726 units from 2,943 units during the period under review.

Housing prices appreciated 7 per cent annually to Rs 4,437 per square feet during January-June 2022.

Unsold inventories of residential properties came down by 6 per cent to 95,811 units on improved sales performance.

"In H1 2022, NCR's residential market maintained demand momentum with half-yearly sales of 29,101 units. This is the highest sales clocked in any half yearly period since H2 2013," the report said.

With the prevalence of low home loan interest rates for the most part of H1 2022, Knight Frank India noted that sustained homebuyer interest was maintained in the residential market.

Talking about property rates, the consultant said many developers have increased residential prices in the past few quarters to absorb the rising input costs.

"In the past six months, the impact of rising input costs for cement and steel have bumped up the residential product pricing in NCR in a very pronounced manner. Due to the current demand momentum, prices have firmed up across many locations," the report noted.

On the Delhi-NCR office market, Knight Frank said the gross leasing of office space rose 69 per cent to 4.1 million square feet in January-June 2022 from 2.4 million square feet in the corresponding period of the previous year.

New supply, however, fell 17 per cent to 2.5 million square feet from 3 million square feet.

The average rentals went up by 1 per cent annually to Rs 81.5 per sq ft per month.

"In H1 2022, the National Capital Region (NCR) staged a strong comeback and emerged as the second-best performing office market across the top eight cities in terms of office space leasing.

"Significant upswing in office leasing velocity was noticed in this period despite the short-lived third wave of the pandemic which had minimal impact on mobility and occupier mindset," the report said.

In January-June 2022 period, Gurugram accounted for 2.9 million square feet of office space leasing, which was the highest across the other zones of NCR.

Gurugram's share in NCR's overall leasing has increased sequentially in the past one year.

"From 52% in H1 2021, it increased to 64% in H2 2021 and stands at 71% of the total at the end of H1 2022," the report said.

At the end of the H1 2022 period, NCR's office vacancy reduced by 204 basis points and stood at 14.4 per cent, it added.