January-March Home Sales Hit 4-Year Highs in Top 8 Cities: Report

Residential real estate markets in the country’s 8 main cities saw January-March sales hit a 4-year high despite the disruption created by the third wave of the Covid19 pandemic.

The first quarter of the new year saw quarterly sales hit a record high of 78,627 residential units, up 9% from a year ago, while all major markets recorded an increase of 1-7% of the average capital value of residential properties as demand continued. strengthen, showed a report by Knight Frank India.

Supply in these markets also kept pace with rising demand, with new property launches recorded at 78,171 units. Mumbai recorded the highest sales volume with 21,548 units in the quarter and Delhi-NCR saw the highest year-on-year growth in new home sales volumes at 123%.

Sales in the quarter significantly exceeded the average pre-pandemic quarterly volume for the third consecutive quarter, signifying a sustained recovery in demand across the country.

Residential market growth has been impressive for India’s key markets over the past few quarters, driven by the strengthening economy as well as consumer financial confidence. Low interest rates, better levels of affordability, healthy wage growth and the waning pandemic with less risk of further disruption have created a favorable environment for homebuyers who have rediscovered the need for new homes and better,” said Shishir Baijal, CMD, Knight Frank India.

All cities posted year-over-year growth in prices per square foot during the quarter. Prices rose the most in Bangalore at 7% YoY, followed by Pune and Mumbai at 5% and 4% YoY, respectively.

According to Baijal, while financial strains remain an important factor for developers in all markets, healthy and sustained activity by homebuyers should pave the way for gradual price increases and allow them to cope with rising costs. critical inputs like cement and steel.

Peak sales were in the sub-Rs 50 lakh category, which accounted for 41% of all sales during the quarter. However, it should be noted that the top category, i.e. Rs 1 crore and above, actually saw an increase in its share of sales during this quarter. This category accounted for 25% of all sales, up from 18% a year ago.

The Mumbai market remained the largest by volume and value, but posted slower growth of 9% year-on-year. This decline, however, was attributed to a higher basis due to the reduction in stamp duty granted by the state government to encourage sales during the same period last year.

Sales momentum in the country’s commercial capital was also hampered at the start of the current quarter due to the non-closure surrounding Omicron, but sales picked up in the latter part as consumers rushed to close deals. ahead of the April 1 implementation of a 1% metro cess and the upward revision of Ready Reckoner (RR) rates, which will increase the cost of acquiring property in the city.

Although launches were down 24% year-over-year in Q1 2022, this is the highest quarterly launch volume since Q1 2018. Q1 2022 remains on par with demand and should be able to support and help price growth.

The Delhi-NCR market has been subdued for a long time. However, during the pandemic, the demand registered a strong increase and the supply also evolved in parallel. With 15,019 units sold, the market saw a 123% year-on-year sales increase and a whopping 692% increase in launches to around 12,800 new units. This indicates that the market has strong latent demand, but has remained below average activity for reasons ranging from quality of supply, poor developer track records as well as general buyer inertia in waiting for better prices.

Bangalore, which was the third-largest residential market by sales volume, also saw 34% year-on-year growth in the quarter, with new sales of 13,663. Ahmedabad, although on a lower base, also saw impressive growth of 34% from a year ago with sales of 4,105 units.

New launches in the first quarter recorded similar volumes to sales. With 78,171 new units added during the quarter, launches grew by 3%. Mumbai (-24%) and Pune (-49%) are the only two markets that saw a year-on-year drop in launches. NCR recorded a substantial increase of 692%, the Kolkata market also recorded strong growth, encouraged by the sales volumes the market is attracting, to note a 141% year-on-year increase in new units launched.

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