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Home sales hit a 9-year high in 2022, the second-best year ever for office rentals: Knight Frank

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  • 2022 can be considered a turning point for residential real estate in India’s eight largest cities, according to a Knight Frank report.
  • Encouraged by good sales velocity, new project launches in 2022 also grew by 41% compared to the previous year.
  • Real estate prices rose between 4 and 7% in all markets.

Property sales in India’s top eight markets rose 34% in 2022 to a nine-year high of 312,666 units, according to a report called India Real Estate: 2022 by consultancy Knight Frank India.

The report added that 2022 can be considered a turning point year for the residential sector in India’s eight largest cities.

“The residential sector has been an exceptional growth story in 2022, as the pace of growth has remained largely intact despite numerous setbacks. This momentum is the result of a definitive shift in attitudes in favor of homeownership that has fueled latent demand,” said Shishir Baijal, Chairman and MD of Knight Frank India.

Buoyed by this sales speed, launches also saw a commensurate increase – growing 41% in 2022 compared to the previous year. The NCR region experienced the highest growth in property sales – at 67%, followed by Ahmedabad at 58% and Bengaluru at 40%. Sales in Kolkata alone recorded a 10% drop in 2022.

Baijal said sales momentum has continued despite deteriorating affordability due to rising home loan interest rates and moderate price increases. Real estate prices increased by 4-7% in all markets in 2022.

“We estimate that the pace of sales will remain unchanged in the new year as most parameters are expected to remain favorable, including inflation levels which are expected to stabilize by mid-2023,” he added.

City Price movement in 12 months Price movement in 6 months
Mumbai 7% 3%
NCR 7% 1%
Bengaluru 7% 3%
Poona 7% 1%
Chennai 6% 1%
Hyderabad 6% 1%
Kolkata 4% 0%
Ahmedabad 4% 1%

Source: Knight Frank

The gross rental of office space was also high

As offices have opened after two long years, the total gross rental activity in office space has increased by 36% year-on-year in 2022 compared to 2021.

According to the report, 2022 is historically the second best year for office transaction volume, as it peaked in 2019, despite global economic uncertainty in the last quarter of 2022.

“The office market has made a significant recovery in 2022 despite concerns about an impending recession in developed economies. The evolution of the office as a means to enable productivity continued with more companies recalling their workforce back to the office,” Baijal continued.

New completions in the office space segment were also high, rising 28% in 2022. Bengaluru, Hyderabad and NCR were the top markets adding more office space.

“For the first time in more than a decade, we have seen simultaneous growth across all major real estate segments. Offices, residences, warehouses and retail all registered a significant increase in activity in 2022,” said Baijal.

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