Residential sales hit 9-year high in the first half of 2022: Knight Frank

The rise in sales is despite the overall prices of residential property rising over time. Prices, according to Knight Frank, increased across all markets in the range of 3 per cent - 9 per cent YoY

Sales of residential units in India during the first half of calendar year 2022 (H1CY22) hit a nine-year high of 158,705 units across top eight cities —  Mumbai, National Capital Region (NCR), Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad —, said the latest Knight Frank India survey. The previous high in the first half of the calendar year was recorded in H1CY13 at 185,577 units. The H1CY22 figure is a 60 per cent jump YoY (99,416 residential units sold across these metros in H1-CY21).

At an 8-year high for any half-year period, new home unit launches, Knight Frank said, witnessed an addition of 160,806 units in H1-CY22, marking a rise of 56 per cent YoY from 103,238 units in H1CY21.The strong uptick in sales also brought the quarters to sell (QTS) level down to 7.8 quarters from 10.9 quarters in H1CY21.

The rise in sales is despite the overall prices of residential property rising over time. Prices, according to Knight Frank, increased across range of 3-9 per cent year-on-year (YoY) with some of the larger volume markets of Mumbai (6 per cent), Bengaluru (9 per cent) and NCR (7 per cent) registering notable growths.

“H1CY22 also marks a period where prices have grown in YoY terms across all markets for the first time since H2CY15,” the report said. Home-buying, according to Shishir Baijal, chairman and managing director at Knight Frank India, has seen a strong rebound since the advent of the Covid-19 pandemic, and continues despite inflationary concerns in the economy.
 

“The interest rate cycle having turned during this period which has impacted affordability, but the performance of the broader economy (and changed buyer perceptions) has had a greater bearing on market momentum,” Baijal said.

NCR, Ahmedabad trailblazers

In terms of percentage rise, NCR witnessed the steepest rise of 154 per cent with 29,101 residential units sold in H1CY22, followed by Ahmedabad with a 95 per cent rise (8,197 units). Meanwhile, Mumbai’s sales volume of 44,200 home units accounted for 28 per cent of the total sales amongst the top 8 markets during the period under review, and was the highest among all markets surveyed.

"The high growth in the NCR region was also driven by low sales volume recorded in the H1CY21 period, when sales activity had been adversely impacted due to the Delta variant of Covid-19. As home loans may get expensive, higher outflow for equated monthly instalments (EMIs) for homebuyers will dent their home-buying affordability, especially in the affordable and mid-end segments going ahead,” said Mudassir Zaidi, executive director – north at Knight Frank India.

Meanwhile, the share of sales in the Rs 1-crore and above ticket-size grew significantly from 20 per cent in H1CY21 to 25 per cent in H1CY22 in the NCR region, the Knight Frank report said. This, the findings attribute it to the homebuyers’ need to upgrade to larger living spaces with better amenities.

“That apart, the fact that pandemic-induced income disruptions did not impact higher income categories as they did for the others. On the contrary, the share of home in the Rs 50 lakhs – Rs 1 crore category dropped to 34 per cent in H1CY22 as against 39 per cent in H1CY21.

The Rs 50-lakh and below category declined marginally from 42 per cent in H1-CY21 to 40 per cent,” the Knight Frank report said.