Housing sales rise 51% in top 8 cities in 2021; office leasing lagging, down 3%

Housing sales across top eight cities rose 51 per cent last year, even as the office market continued to slump due to the Covid pandemic with gross leasing witnessing a 3 per cent fall, according to Knight Frank India.

Housing sales increased to 2,32,903 units during last year, from 1,54,534 units in 2020, but demand was down 5 per cent from the 2019 pre-pandemic levels and 37 per cent lower than the 2011 peak numbers.

In the office segment, the gross leasing of office space fell to 38.1 million square feet in 2021, from 39.4 million square feet in the previous year, due to the adverse impact of the second wave of the Covid pandemic.

The demand is much lower than the record 60.6 million square feet achieved in 2019.

Releasing its report 'India Real Estate: 2021', property consultant Knight Frank India said: "In an extraordinary year marred by the pandemic and lockdowns, the real estate sector showed great resilience in 2021."

Housing sales in the second half of the last calendar year witnessed the highest volume since the first half of 2016.

"Despite the disruptions caused by the pandemic, residential sales momentum increased across the key eight markets of the country due to a plethora of demand stimulants such as lowest home loan rates, government sops and change in attitude," Knight Frank India CMD Shishir Baijal, said.

Strong market sentiments should continue to aid market volumes in the near-term, he hoped.

In terms of 12-month residential price change, Chennai, Hyderabad and Bengaluru registered an increment of 7 per cent, 5 per cent and 4 per cent, respectively. Mumbai witnessed a marginal increment of 1 per cent.

The prices were recorded to be stable in Pune, Kolkata and Ahmedabad. The Delhi-NCR saw a marginal decline of 1 per cent.

Replying to a question on the real estate sector outlook during a webinar, Baijal said the housing sales momentum should continue in 2022 unless there is some serious impact of the Omicron variant in the coming few weeks and months.

According to the annual data, housing sales in Mumbai rose 29 per cent to 62,989 units in 2021, from 48,688 units in the previous year. Office leasing fell 37 per cent to 3.8 million square feet. In Delhi-NCR, housing sales increased 65 per cent to 35,073 units from 21,234 units. Office leasing rose 38 per cent to 6.4 million square feet.

Housing sales in Bengaluru were up 61 per cent to 38,030 units, from 23,579 units. Office leasing was marginally down to 12.2 million square feet. In Pune, housing sales rose 38 per cent to 37,218 units, from 26,919 units, while office leasing grew slightly to 3.8 million square feet.

In Chennai housing sales went up 38 per cent to 11,958 units and office leasing fell 14 per cent to 3.9 million square feet. While, in Hyderabad, housing sales jumped over two times to 24,318 units and office leasing remained flat at 6 million square feet.

Housing sales in Kolkata grew 62 per cent to 14,405 units and office leasing dropped marginally to 0.8 million square feet.

Ahmedabad reported a 37 per cent rise in housing sales in 2021 at 8,911 units as against 6,506 units in the previous year. Office leasing fell 12 per cent to 1.1 million square feet.

Commenting on the report, Dhaval Ajmera, Director, Ajmera Realty & Infra said the low interest rate regime makes the market conducive for the home-buyers to purchase a residential property.

"Despite the input cost pressures on the supply side, the demand is expected to be robust and keep the residential economics in upward momentum in the medium term," he added.

Suren Goyal, Partner, RPS Group, said: "The real estate sector is making steady progress braving all the odds. The fast-spreading Omicron variant is emerging as a concern and may impact the commercial leasing segment which is yet to get in the fast lane."

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