Residential Real Estate in demand, home prices up with Mumbai, Bengaluru leading the market
Real Estate demand has witnessed growth and key property markets across India have witnessed price appreciation. Residential prices are supported by increase in sales owing to realisation of need for housing among homebuyers, relatively lower interest rates and a quick rebound in economic activity post the waves of Covid-19 pandemic. Housing prices have grown in year-on-year terms during the first half of 2022 for the first time since the second half of 2015.
1. The top 7 cities in India witnessed new launch of approx. 89,100 new units in Q1 2022 as opposed to 73,800 units in Q4 2021 and 62,100 units in Q1 2021, indicating 21 percent quarterly growth and 43 percent Y-o-Y rise.
2. Despite the temporary pause in the residential real estate activity and numerous other challenges faced by the developers due to the COVID-19 pandemic, the new launches across the 7 cities have consistently showcased signs of improvement and outshined the numbers of the pre-pandemic times.
3. All the cities except NCR and Kolkata showcased a healthy growth in new launch activity in Q1 2022 to cater to the distinct rise in housing demand in these cities.
Key triggers for Price rise:
Improved Economic confidence
Healthy income growth
Interest rates are still low despite rate hikes
Knight Frank India report suggests in terms of price increase, Mumbai and Bengaluru led the price increase with 9 percent rise each. NCR, Pune recorded 7 percent rise. Sales registered year on-year growth of 60 percent in the first half of 2022
Developers also strategically responded to the demand momentum and the shift in sentiment and launched 1,60,806 units in H1 of this year up 56 percent. This is an 8 year high in terms of launches for any half year period.
Real Estate sector has gained momentum even during challenging times and the sector is performing even when there are a lot of concerns in the economy.