Housing sales across the top eight cities grew by 5% to touch 87,108 units in the July-September period. Mumbai led with 9% growth in sales to 24,222 units, making this perhaps the best recorded quarterly sales volumes since 2018, a new report by property consultancy Knight Frank India said on October 3.
As per the report, housing sales have grown across all markets except for the Delhi-NCR where sales have dipped by 7% YoY (year-on-year). Sales in Bengaluru grew at 11% YoY with 14,604 units.
Meanwhile office space transactions grew 18% year-on-year during the three-month period to reach 19 million square feet, the highest quarterly absorption since Q1 2018. It was spearheaded by Bengaluru with a 28% share in the total office volume transactions across the select eight cities during Q3 2024 at 5.3 million square feet, the report showed.
Overall, so far in 2024, the residential segment has recorded sales to the tune of 2.6 lakh units, while the office category has registered leasing of 53.7 million square feet, per the report.
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โThe โน1 crore and above segment continues to fire on all cylinders and remains the primary driver of overall sales growth. Given the steady economic outlook and the likelihood of rate cuts, we believe that demand has enough tailwinds to sustain current momentum as the market approaches the end of the year,โ said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
Speaking on the commercial segment, Baijal said: โWe expect this trend to continue for the rest of the year, with the possibility of office leasing numbers crossing 70 million sq ft by the end of 2024โan astounding 10 million sq ft increase, or a 20% growth over the previous high.โ
Affordable housing a laggard once again
As per the report, homes priced in the โน1 crore and above category constituted 46% of the total sales, growing 41% year-on-year with 40,328 units sold in Q3 2024. Meanwhile, units priced between โน50 lakh to โน1 crore accounted for 30% share of total sales with 26,011 units sold, followed by units under โน50 lakh with 24% market share and sales of 20,769 units in Q3 2024.
The share of affordable housing during the quarter ended September declined by 14% annually with Mumbai and Kolkata emerging as the outlier markets where sales in the segment grew in year-on-year terms. โThe combined impact of rising prices, higher home loan rates, and the relatively adverse effects of the pandemic in this sector persisted, suppressing demand,โ the report noted.
Sales in the mid segment โ homes in the price range of โน50 lakh to โน1 crore – also witnessed a drop of 13% year-on-year in Q3 2024, as homebuyersโ focus shifted to the higher priced category during the quarter. According to the report, the corresponding decline in new launches in this category also played a part in the sluggish sales.
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New launches were recorded at 90,479 units across the eight cities, recording a 6% year-on-year growth in Q3 2024. Mumbai and Pune saw the highest volume of units launched to collectively constitute 43% of the total units launched during the quarter.
Residential prices grew the most in Bengaluru at 10% annually as focus increasingly shifted toward the development of premium properties, the report stated.
The report highlighted that during Q3 2024 the residential sales in Bengaluru (14,604 units) and Pune (13,200 units) surpassed sales of NCRโs residential market.
In fact, NCR was the only residential market to record a de-growth of 7% in sales during the period under review. โ…very low inventory levels in mid and affordable categories in the right locations, have weighed down sales in the market,โ the report said.
Rent growth across all office markets
According to the report, office leasing in Bengaluru grew by a notable 158% year-on-year during the third quarter of the ongoing calendar year, while absorption in Delhi-NCR and Chennai grew at 26% and 35%, respectively. Simultaneously, Ahmedabad recorded a 69% annual uptick.
Meanwhile, the remaining four markets – Mumbai, Pune, Kolkata and Hyderabad – recorded a decline during the quarter under review.
Also Read: Office space leasing touches 53.43 million sq ft in Jan-Sep period: JLL
The report highlighted that global capability centres accounted for the largest share of the leasing pie at 37% or 7.1 million square feet, followed by India facing businesses which grabbed a 35% share in the total transacted volumes across the top eight cities in Q3 2024.
Flexible office space operators and third party IT service providers contributed 16% and 12%, respectively.
As per the report, in Q3 2024, rental values grew across all the eight markets on an annual basis. Rents in the larger office markets of Delhi-NCR, Mumbai and Pune grew by 3% year-on-year while Bengaluru and Chennai rents grew by 7% and 10%, respectively.
