Bengaluru, April 04, 2022: The first quarter of the new year (January – March 2022) has seen quarterly sales attain a 4-year high of 78,627 residential units despite the third wave. This was stated in the latest market assessment report by Knight Frank, India’s premier real estate consultancy. Mumbai recorded the largest volume in sales at 21,548 units in Q1 2022, Delhi – NCR recorded the highest year–on–year (YoY) growth in sales volumes of new homes at 123% YoY. In the same period, new property launches were recorded at 78,171 units. The report also noted that, without exceptions, all the top markets saw a rise in the average capital values of residential properties as demand continued to strengthen. The report – ‘India Real Estate – Q1 2022’, tracks developments in India’s top eight cities[1].
In the first quarter of 2022, 78,627 new homes were sold across the top eight cities which was higher by 9% YoY as against same time last year. This far exceeded the pre-pandemic average quarterly sales volume for the third consecutive quarter signifying a sustained recovery in demand across the country. Mumbai, which remained the largest market by volume, saw sales of 21,548 new units in Q1 2022, registering a -9% YoY decline. Delhi – NCR registered sales grew the most at 123% YoY to 15,019 new homes in first 3 months of the year, making it the second largest market by volume. Bengaluru, which was the third largest residential market by sales volume, also registered a YoY growth of 34% in Q1 2022, with sales of 13,663 new units between January – March 2022. Ahmedabad, albeit on a lower base, also grew at an impressive 34% YoY with sales of 4,105 units.
RESIDENTIAL SALES (IN UNITS) IN Q1 2022
[1] Mumbai, Bengaluru, Delhi – NCR, Pune, Hyderabad, Chennai, Kolkata, Ahmedabad
| Market | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Q1 2022 YoY Growth % | Q1 2022 as % of 2019 Qtr Average |
| Mumbai | 4,855 | 15,942 | 18,440 | 21,548 | -9% | 141% |
| NCR | 4,743 | 9,101 | 14,498 | 15,019 | 123% | 140% |
| Bengaluru | 4,593 | 11,337 | 11,881 | 13,663 | 34% | 114% |
| Pune | 3,821 | 9,565 | 10,179 | 10,305 | -25% | 126% |
| Hyderabad | 5,065 | 5,987 | 6,357 | 6,993 | 1% | 172% |
| Ahmedabad | 1,163 | 1,607 | 3,096 | 4,105 | 35% | 98% |
| Kolkata | 1,519 | 6,861 | 2,429 | 3,619 | 1% | 128% |
| Chennai | 1,693 | 3,610 | 2,597 | 3,376 | -17% | 80% |
| Total | 27,453 | 64,010 | 69,477 | 78,627 | 9% | 128% |
Source: Knight Frank Research. Note: Blanks denote negligible numbers.
Shishir Baijal, Chairman & Managing Director, Knight Frank India says, “The growth in the residential market has been impressive for the key markets of India over the last few quarters, as a result of a strengthening economy as well as individual financial confidence. Low interest rates, best affordability levels, healthy wage growth and the waning pandemic with lower risk of further disruptions have created a favorable environment for homebuyers who have rediscovered the need for new and better housing.”
Shishir continues, “While financial stress remains a significant factor for developers across markets, healthy and sustained homebuyer activity should pave the way for gradual price increases and enable them to tide over the rise in costs of critical inputs like cement and steel.”
New launches in the first quarter registered similar volumes to sales. With 78,171 new units added in Q1 2022, launches registered a growth of 3% YoY over same time last year. Yet again Mumbai recorded the largest volume of new units launched at 23,558 between January – March 2022. NCR with a substantial rise of 692% YoY, recorded fresh launches of 12,880 units. Kolkata market also registered a strong growth, encouraged by the sales volumes that the market has been attracting, to note a rise of 141% YoY in new units launched. Mumbai (-24%) and Pune (- 49%) were the only two markets that registered a YoY decline in number of launches.
NEW RESIDENTIAL LAUNCHES IN Q1 2022 (JANUARY – MARCH)
| Market | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Q1 2022 YoY Growth % | Q1 2022 as % of 2019 Qtr Average |
| Mumbai | 4,747 | 12,136 | 22,015 | 23,558 | -24% | 118% |
| NCR | 1,317 | 8,983 | 8,659 | 12,880 | 692% | 225% |
| Hyderabad | 7,363 | 9,256 | 9,768 | 10,256 | 10% | 304% |
| Bengaluru | 5922 | 8797 | 8421 | 10106 | 35% | 120% |
| Pune | 2,435 | 8,615 | 11,397 | 9,220 | -49% | 83% |
| Ahmedabad | 2,249 | 4,257 | 4,165 | 4,957 | 25% | 173% |
| Chennai | 2,443 | 3,795 | 3,565 | 3,720 | 25% | 129% |
| Kolkata | 756 | 3,128 | 2,187 | 3,473 | 141% | 246% |
| Total | 27,232 | 58,967 | 70,177 | 78,171 | 3% | 140% |
Source: Knight Frank Research. Note: Blanks denote negligible numbers.
Unsurprisingly, the maximum sales were in the sub-INR 5 Mn (INR 50 Lakhs) category which made up 41% of all sales in Q1 2022. However, it is noteworthy that the higher category, that is INR 10 Mn (INR 1Cr) and above actually saw an increase in its share of sales in this quarter. This category made up 25% of all sales in Q1 2022 as compared to 18% in Q1 2021.
| Category à | <5Mn | 5Mn – 10 Mn | >10 Mn |
| Q1 2021 | 42% | 40% | 18% |
| Q1 2022 | 41% | 35% | 25% |
All cities posted a YoY growth in per square foot (sq ft) prices during Q1 2022. Prices grew the most in Bengaluru at 7% YoY followed by Pune and Mumbai at 5% and 4% YoY respectively during Q1 2022.
AVERAGE PRICE CHANGE ACROSS MARKETS DURING Q1 2022
| Market | YoY Change | QoQ Change |
| Bengaluru | 7% | 2% |
| Pune | 5% | 5% |
| Mumbai | 4% | 2% |
| Kolkata | 4% | 4% |
| NCR | 3% | 5% |
| Ahmedabad | 3% | 3% |
| Hyderabad | 1% | 1% |
| Chennai | 1% | 2% |
Source: Knight Frank Research
MUMBAI MARKET REMAINS THE LARGEST BY VOLUME, BUT SLOWER IN GROWTH
Mumbai recorded a sales of 21,548 new homes in Q1 2022 which was lower by just 9% YoY. This drop comes on the back of stamp duty cut provided by the state government to incentivize sales in the same period last year. The sale momentum was also hampered in the early part of the current quarter due to uncurtaining surrounding Omicron, however sales picked up in the latter part as consumers rushed to close deals prior to the 1st April 2022 implementation of 1% metro cess and upward revision in the Ready Reckoner (RR) rates, which shall increase the cost of property acquisition in the city.
Despite launches being lower by 24% YoY in Q1 2022, it was the highest quarterly volume of launches since Q1 2018. Q1 2022 remain comparable to the demand and should be able to support and aid price growth.
MUMBAI MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 31,125 | 23,752 | 6,750 |
| Q1 2022 | 23,558 | 21,548 | 7,023 |
| % Change YoY | -24% | -9% | 4% |
NCR TURNING A NEW RESIDENTIAL LEAF
Delhi – NCR market had been subdued for long period of time. However, during the pandemic, demand recorded a surge and supply moved in tandem to meet demand. With 15,019 units of sold units, the market saw a rise of 123% YoY in sales over same time last year. Even more impressive was the rise in launches which was a whopping 692% YoY leading to addition of ~12,800 new units. These statistics indicate that the market has strong latent demand but had remained subpar in activities due to reasons ranging from quality of supply, poor developer track records as well as a general inertia from purchasers awaiting better prices. During the last year, the most important change has been the change in attitude from end users towards ownership of homes favouring purchase.
NCR MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 1,626 | 6,731 | 4,274 |
| Q1 2022 | 12,880 | 15,019 | 4,421 |
| % Change YoY | 692% | 123% | 3% |
BENGALURU MARKET FIRMS UP BACKED BY STRENGTHENING DEMAND
Bengaluru residential market is largely driven by end-users and as we have seen in the past few years, there has been an inclination towards home ownership. The city has the maximum number of Information Technology (IT) professionals and home to large number of startups and other allied businesses. These businesses experienced a growth in the last year leading to financial security as well as growth in wealth. This confidence is adequately apparent in the way the residential markets have behaved with both demand and supply rising. In Q1 2022, the city registered a record sale of 13,663 units, a 34% YoY growth. In tandem with demand, the residential supply remained robust in Q1 2022 with 10,106 launches, a ten-quarter high. Noteworthily, the average price of residential unit in the city rose by 7% YoY, a testimonial to the underlying confidence of the market.
BENGALURU MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 7,467 | 10,219 | 4,920 |
| Q1 2022 | 10,106 | 13,663 | 5,253 |
| % Change YoY | 34% | 35% | 7% |
HYDERABAD RESIDENTIAL MARKET SHOWS CONTROLLED GROWTH
The resilient market of Hyderabad experienced stable growth in the last quarter. One the major markets of the country which exhibited sustained development without any state government interventions, recorded a 1% YoY growth in sales in Q1 2022. A total of 10,256 new units were launched, translating to a 10% YoY growth. Hyderabad residential market has a mix of end users and investors and with the economy growing and positive traction from both end users and investors, demand is projected to stay robust.
HYDERABAD MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 9,349 | 6,909 | 4,734 |
| Q1 2022 | 10,256 | 6,993 | 4,775 |
| % Change YoY | 10% | 1% | 1% |
PUNE MARKET RECORDS A SLOWDOWN
Pune recorded sales of 10,305 new homes in Q1 2022 which was lower by 25% YoY. While the drop seems substantial, it must be noted that the base period was a record quarter in terms of sales due to the stamp duty cut provided by the state government to incentivize sales at that time. Whereas sales momentum was hampered in the early part of the current quarter due to Omicron. However, sales picked up in the later half as consumers rushed to close deals prior to implementation of 1% metro cess and upward revision in the RR rates.
PUNE MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 18,042 | 13,653 | 4,010 |
| Q1 2022 | 9,220 | 10,305 | 4,200 |
| % Change YoY | -49% | -25% | 5% |
CHENNAI MARKET A MIXED BAG
The supply of new flats in the Chennai market increased by 25% YoY in the first quarter of 2022, totaling 3,720 new units. Sales remained subdued observing a 17% YoY decline during the same period. The YoY decline is largely resultant of the strong sales numbers registered during the same period last year, as the market responded to low pricing post recovering from the peak pandemic period.
CHENNAI MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 2,981 | 4,058 | 4,098 |
| Q1 2022 | 3,720 | 3,376 | 4,139 |
| % Change YoY | 25% | -17% | 1% |
AHMEDABAD MARKET IMPROVES STEADILY
The Ahmedabad market recorded launches of 4,957 new homes translating to a rise of 25% in Q1 2022 as against Q1 2021. Sales for the same period were recorded at 4,105 units, a rise of 35% which reflects the improving sentiments in the market. The market has shown steady sales growth off late reflecting the reviving interest from home buyers. While prices have grown 3% YoY during the quarter, they are more a reflection of the rise in input costs.
AHMEDABAD MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 3,977 | 3,045 | 2,800 |
| Q1 2022 | 4,957 | 4,105 | 2,875 |
| % Change YoY | 25% | 35% | 3% |
KOLKATA RECORDS SIGNIFICANT RISE IN LAUNCHES
Kolkata saw a surge in new launches in Q1 2022 with a rise of 141% (on a low base) YoY over the same time last year. Last year, due to the continued effects of the pandemic, residential launches remained limited. Corresponding to that, the city saw a very marginal rise of 1 % in sales of new homes in Q1 2022. Encouraged by the extension of the stamp duty rebate as well as generally buoyant sales, developers want to take advantage of the momentum, leading them to launch new projects. However, it is also important to note that prices have also risen by 4% YoY in Q1 2022 which could lead to some slowdown in demand in the future months.
KOLKATA MARKET UPDATES
| Launches | Sales | Prices | |
| Q1 2021 | 1,439 | 3,596 | 3,226 |
| Q1 2022 | 3,473 | 3,619 | 3,345 |
| % Change YoY | 141% | 1% | 4% |