Residential Sales Grow By 51% Yoy in 2021

In an extraordinary year marred by the pandemic and lockdowns, the real estate sector showed great resilience in 2021. In their latest report, Knight Frank India note that the Residential Sector had an unprecedented year of growth with sales rising by 51% year on year (YoY) to be recorded at 232,903 units across the top eight cities of the country. New home launches also saw a significant rise of 58% YoY with the addition of 232,382 units in 2021. For the Commercial office segment, the year was a mixed bag. Leasing volumes, recorded at 38.1 million square feet (MSF) though remaining at similar levels as 2020, clearly indicated towards the potential the market has in terms of leasing. Noteworthy is that an overwhelming 68% of the total leasing in 2021 took place in the second half of the year. Bengaluru led the pack with 12 MSF of total leasing during the year. New completions in 2021 for office space was recorded at 39 mn sq ft, higher by 9% over the preceding year. Knight Frank India, in its latest report, India Real Estate: H2 2021 cited that 133,487 housing units were sold in second half of the year 2021 cumulatively for the top eight cities. This also showcased a substantial 41% increase Year-on-Year (YoY). Around 69,477 housing sales were reported in Q4 2021. Residential prices stayed steady or recorded marginal growth in seven of eight cities during the year. Homes priced over Rs 50 lakhs constituted around 58% of the overall sales in H2 2021. From the perspective of half-yearly sales, H2 2021 posted the highest sales volume since H1 2016. Low interest rates, improving affordability, and a resurging interest in home ownership due to the space constraints imposed by the pandemic, have been the primary drivers of this revival in demand “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. Sentiments remain strong and should continue to aid market volumes in the near term. While buyer preferences were skewed towards ready inventory, established developers with a robust execution record are increasingly finding a market for their under-construction inventory.” While speaking to Realty+ Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “This time last year, India had just started to come out of the first wave of the COVID-19 and sections of the India Business had started to revive. However, even before this growth was ready, India was the hit by the far deadlier delta between the second wave. It had a greater number of casualties. And from an economic perspective, weaken the sentiments. However, interestingly, the real estate sector witnessed an unexpected fallout of the pandemic of paradigm shift in the attitude of the end-users for residential properties. The residential sector saw growth of the consistent slowdowns over seven years. The sales volumes have now grown substantially over the last five quarters, mostly because of the change in the viewpoint of the end users who perhaps due to the uncertainty caused by the pandemic started gravitating towards security of homeownership. Once the residential segment witnessed strong growth, the office sector was a mixed bag. The challenge to office space came mostly from the IT and service sector with a complete return to Office has still not been achieved. Having said that, IT sector has been very actively hiring with an additional five to 25% new staff in the past year. And we are certain that this will create requirements for additional office space in the New Year. The incremental office take up expected from the top five IT companies in India alone is estimated to be at about 12 million square feet of space. We have noticed a divergent trend in office leasing and residential sales was office leasing grew year after year. The residential sales declined over a period of time we've seen that appear a long time in the coming years. Both these important sectors will start showing simultaneous growth. The only thing that causes a shadow of doubt on this revival is the possible third wave,” Baijal concluded.