Housing sales jumped nearly 13% QoQ to more than 70,000 units in Q1 2022 and sales rebounded significantly by approximately 40% YoY, according to CBRE.
As per CBRE South Asia Pvt Ltd’s findings of their ‘India Market Monitor – Q1 2022’, the affordable/budget segment’s share in sales remained stable at 27% in Q1 2022 vis-à-vis Q4 2021. While sales in the high-end category jumped to 23% in Q1 2022 as against 16% in Q4 2022, those in the mid-end segment dropped to 41% in this quarter. The premium and luxury housing segments also witnessed a slight uptick in sales on a QoQ basis.
New unit launches jumped by nearly 30% YoY to cross the 60,000-unit mark in Q1 2022. With shares of 43% and 30%, mid-end and high-end categories dominated new launches in the country.
“The residential sector is poised for a strong 2022 as both sales and new launches are set for a robust performance after exhibiting resilience last year. Continued policy push by the government (especially to the affordable and mid-end segments), improved vaccination coverage, revival in economic activity coupled with attractive mortgage rates are likely to aid a strong performance by the residential sector,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.
“While we believe that mid-end and affordable categories would continue to drive sales, premium and luxury categories have also witnessed renewed investor interest, fuelled by the anticipated appreciation in capital values and increased activity by HNIs and NRIs,” said Gaurav Kumar and Nikhil Bhatia, Managing Directors for Capital Markets and Residential Business, CBRE India.
The report also highlighted that cities in the western part of the country continued to drive sales as well as unit launches. Pune led housing sales in Q1 2022 with a 27% share, followed by Delhi-NCR (21%), Mumbai (20%) and Bangalore (14%). In terms of unit launches, Pune dominated among cities with a 29% share, followed by Mumbai (22%) and Hyderabad (20%).
Residential Market Outlook:
* Uptick in new launches expected, especially in Pune, Mumbai, Hyderabad, Delhi-NCR and Bangalore.
* Rise in capital values likely; asset pricing trends would remain divergent with an uptick expected on account of growth in sales and rising input and labor costs.
* Mid-end and affordable categories to drive sales; however, premium and luxury categories are expected to witness renewed investor interest.
* Growing popularity of hybrid work and sporadic homeschooling driving the need for larger unit sizes; growing focus on plotted developments as they offer flexibility on configuration and ancillary amenities.
* As end-use takes precedence over speculative investment and buyers become more informed, developer reputation, execution capabilities and financial position would play a bigger role in home purchase decisions.
Office: Positive leasing momentum poised to gain further strength.
* Supply addition in Q1 2022 touched nearly 9.4 million sq. ft., down by about 11% Y-o-Y and 41% Q-o-Q; leasing activity recorded at 11.4 million sq. ft., up by 97% Y-o-Y but down by 25% Q-o-Q.
* Small- to medium-sized deals (up to 50,000 sq. ft.) dominated space take-up with a share of almost 84% in Q1 2022.
* Bangalore, followed by Hyderabad and Chennai, dominated supply, with a combined share of 70%
* Technology firms drove the overall leasing activity with a 34% share, followed by BFSI (17%) and flexible space operators (13%)
* Leasing activity is expected to strengthen further in the coming quarters on account of a combination of pent-up demand and expansion / consolidation-led leasing as occupiers start to realign their post-pandemic business strategies.
* Continued growth in supply expected, with focus on large-sized and high-quality buildings by developers to differentiate their assets and attract occupiers.
* Large institutional players to continue with greenfield investments via JVs / partnerships / platforms or brownfield investments via REITs, which in turn would boost upcoming supply in the coming years.
* Occupiers expected to recalibrate workplace designs; demand for sophisticated and tech-enhanced real estate offerings to grow as occupiers focus on providing a safe and healthy workplace to employees while meeting their need for flexibility.