Residential sales hit 9-year high in 2022, second best year ever for office leasing: Knight Frank

• 2022 can be considered a watershed year for residential real estate across India’s top eight cities, said a Knight Frank report.
  
• Encouraged by good sales velocity, new project launches also grew 41% in 2022 as compared to the year before.
  
• Real estate prices rose in the range of 4-7% across markets.

The real estate sales in India’s top eight markets in 2022 rose 34% to a nine-year high of 312,666 units, as per a report named as India Real Estate: 2022 by consultancy firm Knight Frank India.

The report added that 2022 can be considered a watershed year for the residential sector across the top eight cities of India.

“The residential sector was an exceptional story of growth in 2022, as despite numerous inflictions, the pace of growth remained largely intact. This momentum is the result of a definitive shift in attitude in favour of home ownership that has ignited the latent demand,” said Shishir Baijal, chairman and MD of Knight Frank India.

Encouraged by this sales velocity, launches also saw a commensurate rise – registering a 41% growth in 2022 as compared to the year before. NCR region saw the most high growth in real estate sales – at 67%, followed by Ahmedabad at 58% and Bengaluru by 40%. Only sales in Kolkata registered a fall of 10% in 2022.

Baijal said that the sales momentum has remained despite worsening affordability on account of rising home loan interest rates and moderate price rises. Real estate prices grew in the range of 4-7% across markets in 2022.

“We estimate the pace of sales to remain unchanged in the new year, as most parameters are expected to remain favourable, including levels of inflation that is expected to start stabilising by mid of 2023,” he added.

Source: Knight Frank

Gross leasing of office spaces was also high

As offices have opened up after two long years, the overall gross leasing activity in office spaces increased by 36% YoY in 2022 as compared to 2021.

The report said that 2022 is historically the second-best year for office transaction volume, as it achieved a peak in 2019. This was in spite of global economic uncertainty seen in the last quarter of 2022.

“The office market has made a significant recovery in 2022 despite concerns of a looming recession in the developed economies. The evolution of the office as an enabler of productivity continued with more corporations recalling their staff to office,” Baijal further said.

New completions in the office space segment were also high and saw an upswing by 28% in 2022. Bengaluru, Hyderabad and NCR were the top markets which added more office spaces.

“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 increase in activities in 2022,” Baijal said.

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