Indian residential market records 9 year-high sales volume; Chennai records 21% YoY rise in residential units: Knight Frank India

• Indian residential market records 9 year-high sales volume of 158,705 housing units in H1 2022

Mumbai, July 06, 2022: In their latest report, Knight Frank India noted that the residential sector has recorded a 9-year high in the sales volume in H1 2022 (January – June 2022). The residential sector saw an annual growth of 60% in H1 2022 to 158,705 housing units across top eight cities in the country from 99,416 in H1 2021.The previous high was recorded in H1 2013 of 185,577 units. At an 8-year high for any half-year period, new home unit launches witnessed an addition of 160,806 units in H1 2022marking arise of 56%Year on Year (YoY) from103,238 units in H1 2021.The strong uptick in sales also brought the Quarters to sell (QTS) level down to 7.8 quarters from 10.9 quarters in H1 2021. 

Mumbai (44,200), National Capital Region (29,101) and Bengaluru (26,677) were the leading residential sales performers in H1 2022.NCR and Ahmedabad witnessed the highest home sales (in terms of percentage growth) during H2 2021 at 154% and 95% YoY respectively. According to the report, residential prices recorded a strong growth across all cities during the first half of the year. The share of sales in the INR 10 mn and above ticket-size grew significantly from 20% in H1 2021 to 25% in H1 2022. 

For the Commercial office segment, the India office market grew substantially and delivered a strong performance in H1 2022. Office transactions recorded at 25.3 million square feet (mnsq ft)grew by107% YoY, indicating the potential of the market on the back of a waning pandemic and the promise of a sustained economic recovery. Bengaluru led with 7.7 mnsq ftfollowed by NCR with 4.1 mnsq ft of office transactions during H1 2022. New completion volumes,which have been the highest since the start of the pandemic,were recorded at 24.1 mnsq ft, higher by 61% over H1 2021. 

On the office market performance, Knight Frank India cited that all the top eight cities witnessed substantial growth during H1 2022, recording transactions of 25.3 mnsq ft in Jan – June 2022, whereas the office completions were recorded at 24.1 mnsq ft in the same period. Bengaluru constituted 31% of the total area transacted with the highest rental increase of 13% YoY in H1 2022. With the increasing need for flexibility and a hybrid working environment, co-working/managed office sector’s transactions share increased to 17% in H1 2022 from 10% in H1 2021. 

Knight Frank India today launched the 17th edition of its flagship half-yearly report - India Real Estate: Residential and Office Market H1 2022 – which presents a comprehensive analysis of the residential and office market performance across eight major citiesfor the January – June2022 period. As per the report latest report, India Real Estate: H1 2022 

• Chennai records 21% YoY rise with sale of 6,951 residential units in H1 2022

Knight Frank India in its latest report, India Real Estate: H1 2022 (January – June 2022) cited that the Chennai residential market registered a 21% Year on Year (YoY)growth in sales in H1 2022.The city recorded sales of 6,951 housing units in H1 2022 compared to 5,751 housing units sold in H1 2021.The new home launches also increased by 40% YoY from 5,424 housing units in H1 2021 to 7,570 housing units in H1 2022. The weighted average price of residential properties in Chennai rose by an estimated 5% YoY to INR 4,242 per sq ft. With increased launches, the Quarters to sell (QTS) has marginally increased from 4.2 quarters in H1 2021 to 4.4 quarters in H1 2022.

In H1 2022, office transaction volumesincreased by 80% YoY to be recorded at 2.2 mnsq ft. Newoffice completions recorded a growth of 272% YoY with 3.0 mnsq ft of new spaces completed during the same period.IT remained the most active sector which claimed 29% of the transacted space. This was followed by BFSI which saw a rise in its share to 23% in H1 2022 from its previous 6% in H1 2021. Rental values have remained stablewith no change on a YoY basis in H1 2022. Suburban Business District (SBD) continued to lead the market with 43% share of total space transacted during the period.

With improved consumer sentiment,the city observed a continuous rise in the number of homebuyer inquiries and conversions in recent period. Homebuyers have become increasingly amenable to explore properties in new locations, for larger spaces with better amenities in order to improve the general quality of life. As a result of that, sales (23%) as well as new launches (40%) saw a noteworthy rise.  The share of sales for units above INR 10mn (INR 1 Crore) category witnessed the a  yoy increase 8 percentage points to constitute 23% of all home sales in H1 2022. On the contrary, there has been a notable decline in the share of sales for homes below INR 5 mn(INR 50 Lakhs) to 31% in H1 2022from 54% in H1 2021. 

South Chennai dominated the sales with 58% of the total sales recorded during H1 2022. The south micro-market locations along the OMR and GST Road have continued to garner homebuyer interest, followed by the affordable locations in West Chennai such as Porur, Valasaravakkam and Poonamalle.

Residential demand was largely focused on the ready-to-move-in or near ready properties which has caused the average age of inventory in Chennai to reduce to 12.6 quarters in H1 2022from 16.5 quarters in the year ago period. The unsold inventory and QTS have increased marginally in YoY terms as launches exceeded demand during H12022.

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