Despite the pandemic, the residential real estate market is booming, with homes selling like hot cakes. The residential segment in top Indian cities has remained overly optimistic, making it a top investment choice. The demand for residential real estate in India’s top cities has risen in tandem with the COVID-19-induced pandemic, as the pandemic and successive lockdowns have caused a strong desire among people to own a house. Additionally, the pandemic has served as a reminder that one’s home is the safest place to be during difficult times.
According to Knight Frank’s latest market evaluation report, despite the third wave, quarterly sales in the first quarter of 2022 (January-March) surpassed 78,627 residential units. Mumbai recorded the largest volume in sales at 21,548 units in Q1 2022, while Delhi-NCR recorded the highest year-on-year (Y-o-Y) growth in the sales volume of new homes at 123 per cent. Bangalore, which ranked third in terms of residential sales volume, also posted an yearly growth of 34% in Q1 2022, with 13,663 new units sold. The report also concluded that all the leading real estate markets witnessed an increase in capital values for residential properties owing to the surging demand among homebuyers.
Speaking about the bright prospects of the residential real estate sector, Vivek Singhal, CEO of Smartworld Developers Pvt Ltd, said, “The Year 2022 started on a high note for the real estate industry as major excitement has been witnessed on both sides of developers and buyers. The pandemic recovery is enhancing buyers’ affordability day by day as their finances are recovering. In addition, the industry will continue to benefit from a regime of low interest rates, coupled with the infrastructural initiative taken by the government. We expect that the capital value of the apartments across key metros will appreciate anything between 5% and 12% owing to the increase in the input cost of key materials like cement, steel and other important raw materials.”
“In 2022, prospective homebuyers will continue to prefer bigger homes, better amenities, an idyllic location, and a comprehensive lifestyle ecosystem. Also, as the work from home gets lesser takers and a majority of the workforce returns to offices, it will positively impact the demand for the residential segment. We foresee 2022 to be the year of residential real estate, dominated by the millennial homebuyers who are investing in real estate more than ever,” added Singhal.
NCR Leading the Residential Segment
According to the recent Anarock research data, quarterly home sales in the top seven cities of India were recorded at 99,550 units in Q1 2022, representing a 71% year-on-year increase from the approximately 58,290 units sold in the first quarter of 2021. NCR and MMR, the two dominant realty hotspots, registered over 48% of total sales in the top seven cities with NCR witnessing an yearly increase of 114%.
Many factors are influencing the real estate market in the wake of the debacle sparked by the COVID-19 pandemic. Additionally, historically-low home loan interest rates are encouraging real estate developers to offer a wide array of choices at an attractive price. Additionally, government-backed subsidy programs are also fuelling homebuyers’ enthusiasm.
Mohit Jain, Managing Director, Krisumi Corporation, said, “Benign interest rates, hybrid work mode and pandemic led realisation of the need for one’s own home as a primary life goal, attractive pricing and the supportive government policies will continue to boost the sales momentum in the residential real estate markets. Mortgage rates are the lowest ever historically and have played a significant role in aiding homebuyers convert their demand into actual buying. At Krisumi, we have witnessed an unrivalled demand. We have sold more than 75% of our inventory and we will soon be stocking out. The market has shown green shoots of recovery and the accommodative market conditions will further drive the upward thrust.”
“The real estate sector brings huge benefits and opportunities such as stability, future security, assured returns etc, and currently attracts homebuyers who are planning for a secured future and hassle-free living. Therefore, the realty sector has become the most preferred investment choice of buyers and investors. As per an industry report, the realty sector is set to experience an approximate 5% capital value growth in the residential segment in the year 2022. This can also be seen with the steady recovery and momentum in Q1 of the financial year 2022,” said Santosh Agarwal, CFO & Executive Director, Alpha Corp.
An Eventful Year Awaits the Residential Segment
Considering the positive outlook for the real estate sector, it appears reasonable to anticipate that India’s residential sector is set to perform exceptionally well in 2022. Home sales will gain traction this year due to the growing preference for larger homes, better amenities, and competitive pricing.