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Housing Sales Create New Record In 2022

By Rishabh Chamoli | 2022-11-01

Total housing sales will exceed 3.6 lakh units in the top 7 cities in 2022 the last peak in 2014 saw 3.43 lakh units sold, says a study

Going by the momentum in housing sales in the ongoing festive period and that of the first three quarters this year, 2022 will likely breach the previous peak of 2014 with all time high sales across the top 7 cities. Latest ANAROCK data projects total sales in the top 7 cities to exceed 3.6 lakh units in 2022. In the previous peak year of 2014, the top 7 cities saw 3.43 lakh units sold.

The January September period of 2022 saw housing sales and new launches surpass the full year readings of 2019 with approximately 2.73 lakh units sold in 9 months of 2022 and new launches at 2.65 lakh units. 2019 saw over 2.61 lakh units sold in the entire year, while new supply stood at 2.34 lakh units. MMR and NCR have retained their top slot rankings in the first nine months of 2022. Approx. 1,30,450 units were collectively sold in these two regions, accounting for 48% of the total sales in the top 7 cities. Other high selling cities were Pune, Bengaluru, and Hyderabad, which accounted for a 42% cumulative sales share.

Sales see growth despite price rise
Housing sales remained strong despite average property prices increasing in 2022, with the annual price appreciation in Q3 2022 being the best in the past seven years is 6% against Q3 2021.

Anuj Puri, chairman, ANAROCK Group, says, 2022 will create residential market history in India, having already breached all previous highs and continuing to witness strong sales momentum in the ongoing festive season. Homeownership sentiment retained the vibrancy ushered in by the Covid19 era despite interest rates hikes of 190 bps, increased property rates, and the conspicuous lack of festive season offers and discounts this year.

A combination of end user and investor demand continues to zero in on projects by large and listed developers. These players report consistently high sales and are stepping up new supply infusions into the market. Total new launches in 2022 will remain lower than the previous peak of 2014, which saw approximately 5.45 lakh homes launched across the top 7 cities.

Current trends indicate that launches in these cities will exceed 3.4 lakh units in the whole of 2022. The first nine months of 2022 saw 2.65 lakh units launched in the top 7 cities, with MMR and Hyderabad recording the maximum new launches in this period and accounting for 54% of the total new supply.

Market sentiments high
Other reports also corroborate the trends. According to Knight Frank NAREDCO Real Estate Sentiment Index Q3 2022 (July to September 2022), in Q3 2022, 44% of the survey respondents expect residential sales to increase in the next six months. This is in sharp contrast to Q2 2022 when 24% of the respondents held a similar view. Stakeholder sentiments about residential launches have remained largely similar to the Q2 2022 period. In Q3 2022, 76% of the stakeholders expect residential supply to either increase or remain stable in the next six months while in Q2 2022, 77% shared a similar view. In the current quarter, 41% of the survey respondents expect residential prices to increase in the next six months. In comparison, during Q2 2022, only 34% of the survey respondents had a similar take. As the current economic environment unfolds, 42% of survey respondents in Q3 2022 expect the overall economic momentum to increase in the next six months.

Rajan Bandelkar, president, NAREDCO, says, India is a proven economic superpower. Policy and reforms measures undertaken in the recent past, including the announcement of the National Logistics Policy, the incentives offered under the Production Linked Scheme and the rollout of 5G services, are evidence of the countrys economic prowess. As the country positions itself as a manufacturing and innovation hub, it offers favourable business conditions and abundant talent. The country is also a favourite investment destination for foreign funds. The growth has caught their attention and has attracted them to invest in growth areas. A resilient housing sector complements the growth we witness now. The sector has been consistently growing in housing sales and volumes for the past several months and has shown resilience despite the global uncertain economic conditions and soaring inflation. Despite inflationary pressures, prospective homebuyers will continue to invest in the market. The market has several reasons favouring homebuyers. After increasing the repo rate sequentially over the past few months, the RBI will likely increase the key policy rate again in December. But the sequential rise in repo rate has very little impact on mortgages in the affordable housing segment. First-time homebuyers will also receive tax incentives to buy now. With an abundant supply of good quality housing projects, homebuyers can strike a good bargain while transacting.

What realty can expect?
Dhaval Ajmera, director of a realty growup, says, Post Covid, people have realised the value of real estate as an asset class leading to a significant rise in demand for residential and commercial properties. The need for that extra living space, all inclusive amenities and advanced infrastructure has influenced people to upgrade their homes. On the commercial properties front, top corporate is back to office and are re hiring at a tremendous rate, driving the need for commercial real estate. As a result, there is a rise in the number of people buying homes and commercial real estate majorly due to the easing of the pandemic induced pent up demand. Backed by the demand factor, we anticipate a decent increase in sales during the festive season and are positive about the notion that Indian real estate will continue to grow with people wanting to upgrade to new, spacious, modernised and tech friendly homes and offices.

Harrish Kumar Jain, vice president, of a developers association, maintains, The Indian real estate sector has witnessed phenomenal growth in the last year. Many people consider the festive season an auspicious time to buy a new home. The festival season will drive the real estate industry to an exponential height this year too. With the availability of various offers going on during the festive season, it brings out the best and lucrative deals for home buyers. Festival season also sees a rise in new luxury projects as the customers feel its the ideal time to buy a new house.

Manju Yagnik, another senior NAREDCO official, says,Purchasing a home during the holiday season is considered to bring good fortune and is auspicious. The festive season is a much anticipated time of year when potential home buyers prefer making purchases, which provides a significant boost to the real estate sector and therefore is marked by the launch of new projects, as well as a range of benefits. The uncertainties of 2020 & 2021 have inspired people to reconsider their priorities and thus owning a home has become more important because it represents safety and convenience. According to a recent report, the residential sector saw a 9year high in sales volume in January June 2022. The sector has been performing well in recent months and is expected to continue growing at a consistent pace. The growth of the corporate environment, as well as the growing desire for better lifestyles and homes, go hand in hand with the rise of the Indian real estate market.