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Housing sales set to hit ten-year high in 2022
by Admin September 20, 2022

Housing sales set to hit ten-year high in 2022

Rising mortgage and property rates notwithstanding, India's residential market is expected to maintain demand momentum this year with home sales and new launches likely to break a ten-year trend to cross the 200,000 units mark, according to CBRE's latest report.

After enduring 4 successive disruptions in the form of currency devaluation, RERA, GST, and COVID-19 in the last six years, the housing market is entering a phase of restructuring ahead of what appears to be a long bullish upcycle.

Another attribute coming through is peaked home buyer confidence. Customers are beginning to realise they have a variety of options leading to confident purchase decisions. The market is experiencing strong end-user-driven demand, and there is already a trend of more serious buyers closing sales.

Furthermore, first-time home buyers who were unable to decide earlier are eager to complete the transaction leading into the festive season. A strong reason for that is rising millennial homeownership, powered by higher disposable income and a desire to upgrade to larger, more luxurious spaces with better amenities.

While developers are increasingly focusing on larger ticket sizes (over Rs 1-2 crore), demand for units priced less than Rs 1 crore continued to dominate sales in the first half of 2022. Similarly, while the share of units sized 1,500 sq. ft. and above has increased in new launches, sales remain led by units sized 500 to 1,500 sq. ft.

Indians are also spending money on luxury homes. According to data released by property consultant Anarock, approximately 14% (about 25,700 units) of the 1.84 lakh units sold in the country's top seven cities in H1 2022 were in luxury homes. In comparison, only 7% of the 2.61 lakh units sold in 2019 were in the luxury category.

The Mumbai Metropolitan Region and Delhi-NCR have led luxury home sales, with around 17,830 units sold in these two cities alone in H1 2022. In 2019, they accounted for only 11,890 of the total number of luxury homes sold in the year.

Encouraged by the strong demand in luxury offerings, developers have increased new supply in the luxury segment, launching over 28,000 units priced above Rs 1.5 crore across the top seven cities in just the first half of 2022. In total, approximately 28,960 luxury homes were launched in 2019.

Land acquisition has also grown in popularity. There is a palpable increase in interest in this sector from both developers and investors. The residential sector accounted for nearly 36% of the nearly $5 billion spent to acquire approximately 4,000 acres of land/development sites between 2020 and H1 2022, the highest among all real estate sectors.

But the greatest share of the pie comes from the office sector which dominated investment activity with a 48% share, followed by development sites/land at 33%. The notable improvement comes from the retail investment, which accounted for 13% of total inflows in H1 2022 compared to 1% in the entire 2021.

All things considered, India’s real estate looks positioned to script a glorious chapter of growth and recovery that could be one of its strongest in decades.


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