Despite rate hikes, residential sales in India at 9-year high: Knight Frank

Along with the rise in sales, new home launches also rose a significant 41 per cent to 328,129 units in 2022

Despite regular rate hikes throughout the year, the annual residential sales in India in 2022 rose to a 9-year high, a report released on Tuesday said. In the top 8 Indian cities, 312,666 units were sold, registering a growth of 34 per cent year-on-year (YoY).  

According to property consultancy Knight Frank's India Real Estate: 2022 report, along with the rise in sales, new home launches also rose a significant 41 per cent to 328,129 units. The gross office leasing also rose 36 per cent YoY. 

"For the first time in over a decade, we have seen simultaneous growth in all major real estate segments. Office, residential, warehousing and retail, all registered a significant increase in activities in 2022," said Shishir Baijal, chairman and managing director at Knight Frank India.

The main factors behind the rise in home and office demand were the reopening of offices and increased hiring. 

"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. This pace of growth is expected to largely remain in the new year owing to continued domestic economic growth," he added. 

The residential sales were led by Mumbai with 85,169 units followed by 58,460 units in the National Capital Region (NCR) and 53,363 units in Bangaluru. 

"This momentum is the result of a definitive shift in attitude in favour of home ownership that has ignited the latent demand. The shift is so strong that despite some worsening in affordability on account of rising home loan interest rates, sales momentum has remained buoyant. Demand for homes has been further strengthened by continued economic growth, financial and income stability and moderately growing prices," Bajpai said. 

Mumbai was the largest market by volume both in terms of sales as well as new launches, followed by National Capital Region (NCR) and Bengaluru.

For office transactions, this is the second-best year ever after 2019. 

According to Bajpai, this was primarily because more corporations recalled their staff to the office. Moreover, new hiring, especially by Indian corporations also added to office space demand in 2022. 

In the next financial year, the pace of demand is expected to remain unchanged "as most parameters are expected to remain favourable".