01-01-1970 12:00 AM | Source: PR Agency
Q3 Residential sales volumes at decadal high; 73,691 housing units sold in Q3 2022: Knight Frank India
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Mumbai : According to Knight Frank India, despite being a year marked by a cumulative 140 bps repo rate hike through various rate cycles until 29th September 2022, the residential market remained resilient in the leading 8 residential markets of India with 2,32,396 home unit sales in 9M CY2022. This is a 40% increase from 1,63,426 residential volume sales in astablerepo rate environmentof 9M CY2021.

On 30th September 2022, RBI increased the repo rate by 50 bps taking the cumulative hike to 190bps in the year 2022. Affordability has worsened by 2% points across cities since the rate cycle changed. Though the interest rate this far has not had a significant impact on sales, with the deterioration ofaffordability, this could become a factor in the coming future.

Knight Frank India, leading international property consultancy, today launched a report - India Real Estate Update (July – September 2022) - which analyses the residential and office market performances across eight major cities for the Q3 2022 period. According to the report, residential sector saw an annual growth of 15% in Q3 2022 to 73,691 housing units across top eight cities in the country from 64,010 in Q3 2021. This is a 20% rise regarding the quarterly average sales observed during the pre-pandemic times of 2019. While the sales volumes remain robust, they have dipped by 8% compared to the preceding quarter. Considering the steady upward trajectory that sales have stayed on over the past four quarters, this modest dip is not a matter of concern.The demand momentum was strong in Q3 2022 with sales in all markets, apart from Kolkata, growing on a YoY basis.

Similar robust activity was observed in new launches growing 15% YoY to 69,687 units in Q3 2022. All markets saw average prices increase in the range of 3% to 10% YoY during this period. This also marks the third quarterly period of consistent YoY growth in prices across all markets.

Mumbai, Bengaluru and National Capital Region (NCR) dominated the home sales activity

Mumbai’s sales volume of 21,450 home units accounted for 29% of the total sales amongst the top 8 markets, highest among all markets. With 13,013 units sold in Q3 2022, Bengaluru also accounted for the second largest share of sales amongst the eight markets of the country. NCR had a similar strong performance with total sales of 11,014 units during the period.

In regards with Quarters to sell (QTS), the strong uptick in sales also brought the Quarters to sell (QTS) level down to 7.1 quarters from 10.3 quarters in Q3 2021.

With respect to ticket size split, what is interesting to note is that the sale of housing units in the INR 10mn (INR 1 crore) and above category observed a substantial rise from 14,082 units in Q3 2021 to 20,633 units in Q3 2022. This resulted inthe increase in share of sales to 28% in Q3 2022 compared to 22% a year ago.This can be attributed to the homebuyers’ need to upgrade to larger living spaces with better amenities. The share of home sales in the INR 5-10 mn category stayed steadywith 26,529 units sold in Q3 2022. On the contrary, the share of units of INR 5 mn and below witnessed a decline from 43% (27,524 units) in Q3 2021 to 36% (26,529units) in Q3 2022.

Regarding average prices, pricesincreased across all markets in the range of 3% –10% YoY with some of the larger volume markets of Bengaluru (10%), NCR(8%) and Mumbai (6%) registering substantial growth.This also marks the third quarterly period of consistent YoY growth in prices across all markets

Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “All real estate asset classes have been on the recovery path over the past few quarters; however, the recovery in the residential segment was the swiftest and most substantial. While the increasing interest rates will impact affordability, underlying need for homeownership remains strong. We do not believe that home loan rates approaching 2019 levels will be enough to subdue market momentum significantly. The performance of the broader economy and homebuyer sentiment will have a greater bearing on market traction for the remainder of the year as it dictates homebuyer income levels and demand much more directly.”

 

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