News: Housing sales jumped by 13% Q-o-Q: Report-29-04-2022
Housing sales jumped nearly 13% Q-o-Q to more than 70,000 units in Q1 2022
Residential Sector is poised for unprecedented growth, according to a CBRE report. The report highlights the growth, trends, and dynamics across various segments of the real estate sectorin India. 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 Q-o-Q basis.
New unit launches jumped by nearly 30% Y-o-Y 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.
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%).
“While we believe that mid-end and affordable categories would continue to drive sales, premium and luxury categories have also witnessed renewed investor interest, fueled 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. In the office segment, 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 while 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%
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.
In the Industrial & Logistics segment, Tier-I cities lead sector’s upward growth trajectory and I&L leasing activity witnessed about 19% Y-o-Y growth to reach 6.5 million sq. ft. in Q1 2022.
Delhi-NCR led absorption with a 27% share, followed by Mumbai (21%) and Kolkata (16%). Space take-up likely to touch about 35-37 million sq ft, led by the continued expansion of e-commerce and 3PL players against the backdrop of macro-economic recovery and rise in online retail penetration.
In the retail segment, prime malls and high streets 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.
At nearly USD 1.4 billion, capital flows up by 24% Q-o-Q in Q1 2022. With a 38% share, land / development sites dominated investments; followed by office (35%) and retail (19%) sectors.
Mumbai, Delhi-NCR and Chennai cumulatively accounted for about 64% of the total investment quantum in Q1 2022 while institutional investors led investment activity with a share of nearly 50%, followed by developers (38%).
An increase of 5-10% Y-o-Y is expected over the 2021 investment value; greenfield assets likely to experience strong investment uptick.
