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Housing Sales: Demand To Be Strong In 2022; Uptick In Unit Launches Expected This Year

By: Business Desk

News18.com

Last Updated: May 01, 2022, 13:19 IST

New unit launches in March 2022 quarter jumped nearly 30 per cent y-o-y to cross the 60,000-unit mark

New unit launches in March 2022 quarter jumped nearly 30 per cent y-o-y to cross the 60,000-unit mark

Office leasing activity is also expected to strengthen further in coming quarters on pent-up demand and consolidation-led leasing

After being hit by the COVID-19 pandemic for about two years, 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. Housing sales in the March 2022 quarter jumped nearly 13 per cent quarter-on-quarter to over 70,000 units and sales rebounded significantly by about 40 per cent year-on-year, according to a report by real estate consulting firm CBRE South Asia.

“The affordable/ budget segment’s share in sales remained stable at 27 per cent in Q1 2022 vis-à-vis Q4 2021. While sales in the high-end category jumped to 23 per cent in Q1 2022 as against 16 per cent in Q4 2022, those in the mid-end segment dropped to 41 per cent in this quarter. The premium and luxury housing segments also witnessed a slight uptick in sales on a Q-o-Q basis," the report said.

It added that new unit launches jumped by nearly 30 per cent y-o-y to cross the 60,000-unit mark in Q1 2022. With shares of 43 per cent and 30 per cent, mid-end and high-end categories dominated new launches in the country.

“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) of CBRE.

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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 the March 2022 quarter with a 27 per cent share, followed by Delhi-NCR (21 per cent), Mumbai (20 per cent) and Bengaluru (14 per cent). In terms of unit launches, Pune dominated among cities with a 29 per cent share, followed by Mumbai (22 per cent) and Hyderabad (20 per cent).

“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 Outlook Going Forward

The report said an uptick in new launches is expected, especially in Pune, Mumbai, Hyderabad, Delhi-NCR and Bengaluru. The rise in capital values is likely; asset pricing trends would remain divergent with an uptick expected on account of growth in sales and rising input and labour costs.

It added that mid-end and affordable categories will drive sales. However, premium and luxury categories are expected to witness renewed investor interest.

The report also said the office 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.

Prime malls and high streets are likely to remain the most sought-after locations. Churn across these key destinations may allow some retailers an opportunity to locate/ scale up across these locations and malls, CBRE said.

An increase in real estate investments of 5-10 per cent y-o-y is expected over the 2021 investment value; and greenfield assets are likely to experience strong investment uptick, it said.

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first published:May 01, 2022, 13:19 IST
last updated:May 01, 2022, 13:19 IST