Residential Sales Witness Growth in Q1 2024
Knight Frank India's quarterly update reveals a 9% increase in home sales to 86,345 units across the top eight Indian cities in Q1 2024. This growth slightly outpaced the 7% increase in new launches, totaling 93,254 units.
City-wise Residential Sales Performance
- Mumbai: Lead the growth with a 17% increase, selling 23,743 units.
- Hyderabad and Pune: Followed as the next top-performing markets.
- National Capital Region (NCR): Witnessed a 1% increase, being the second-largest volume after Mumbai.
- Bengaluru: Reported a 2% decline in sales.
- Kolkata and Ahmedabad: Experienced growth, with Ahmedabad seeing a modest 1% increase and Chennai leading with an 89% expansion in supply.
Inventory and Pricing Insights
- Inventory Shortage: Decreased to 5.9 quarters to sell, down from 6.7 quarters a year ago, due to heightened demand.
- Unsold Units: Increased to 480,420 units by the end of March, influenced by new launches.
- Price Range: More residences priced above Rs 1 crore were sold, potentially due to price increases. Previously, the majority of sales fell between Rs 50 lakh and Rs 1 crore.
- Yearly Price Appreciation: Ranged from 2-13%, with Hyderabad seeing the highest increase and Ahmedabad the lowest. Mumbai and Ahmedabad experienced consistent, though minimal, growth.
Office Demand Driven by Global Capacity Centers
Office Leasing Highlights
- Overall Growth: 43% rise to 16.2 million square feet, driven primarily by global capacity centers.
- City-wise Performance:
- Hyderabad and Pune: Saw significant leasing volume increases of 261% and 146%, respectively.
- Bengaluru: Remained stagnant.
- Kolkata: Experienced a 9% decline.
- New Office Space Completion: Stood at a mere 1.2 million square feet in Q1, highlighting the need for more constructions.
- Rental Rates and Vacancy: Buoyant due to supply-demand imbalance, with Bengaluru, Mumbai, and NCR seeing 4-5% rent growth and a marginal vacancy level reduction, though still above 15%.
Market Outlook
According to Shishir Baijal, Chairman and Managing Director of Knight Frank India, 'the country may end 2024 with record leasing volumes.' The report also predicts improved sentiment in both residential and office markets with anticipated interest rate reductions in the second half of the year.