News Real Estate

Indian realty bounces back across key sectors in 2022


In 2022, the Indian real estate market experienced a resurgence across all three sectors-residential, office, and retail-for the first time in a decade.

Despite rising interest rates and property prices, housing sales have touched a near decade high, and office space absorption has recorded its second-best year in 2022, overcoming the challenge of work-from-home and hybrid work options.

The country’s top eight property markets have seen sales of over 3.12 lakh apartment units in the year, an on-year growth of 34%. New home launches rose 41% with the addition of 3.28 lakh units, according to data from Knight Frank India. The Mumbai property market led residential sales, followed by the National Capital Region (NCR) and Bengaluru.

The Indian office segment saw a strong recovery in demand despite geopolitical challenges, recording gross office leasing of 51.6 million sq ft, a rise of 36% YoY. New office space completions also grew 28% to 49.4 million sq ft. In terms of the demand for office space, Bengaluru led with 14.5 million sq ft, followed by the NCR with 8.9 million sq ft of transacted area.


“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 significant increases in activity in 2022. Factors like change in attitude towards home ownership, return to work, increased hiring, proliferation of e-commerce backed by economic stability, allowed India’s real estate sector to benefit last year,” said Shishir Baijal, CMD, Knight Frank India.

Baijal said this pace of growth is expected to largely sustain itself in the new year owing to continued domestic economic growth. However, India will have to remain cautious of the global geopolitical and economic challenges, as those can cast a shadow on the pace of growth for India.

During the year, in terms of 12-month residential price change, Mumbai, the NCR, Bengaluru, and Pune registered a rise of 7% each. Chennai and Hyderabad witnessed a significant increment of 6%, while Kolkata and Ahmedabad witnessed an increment of 4%.”The funnel of new property launches will reflect an improved capex cycle to cater to growing demand from end-users and investors’ interest. Home prices will continue to grow by another 5-7% in 2023 despite sticky inflation, high borrowing costs, and skilled labour. Going forward, the industry recommends a blend of fiscal and monetary intervention to herald the growth of the labour-intensive real estate sector,” said Niranjan Hiranandani, National Vice chairman, NAREDCO.

A marginal increase in prices is a positive indicator of a strengthening market, but its impact was minimal because demand was adequately met by supply, keeping market dynamics stable.


Source link