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Residential Demand to Stay Intact in 2022

Torbit - July 10, 2022 - - 0 |
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Residential Demand to Stay Intact in 2022

With residential demand rising by 16.9 percent in Q2 2022 and registering 27.7 percent yoy increase, India’s residential sector, regardless of the latest  headwinds in the form of rising material and mortgage rates , is likely to have a stable growth curve, throughout 2022.   

According to latest  Magicbricks PropIndex Report , the residential real-estate market exhibited strength in Q2, 2022, with pan India residential demand (searches) rising by 16.9% QoQ and 27.7% YoY and supply (listings) by 2.9% QoQ and 16.2% YoY. The growth reflects a promising comeback from the pandemic-induced slowdown and the overall economic recovery across sectors. Mapping trends in 13 cities across the country, the report highlights that Delhi (47.2%), Ahmedabad (21.4%), Kolkata (21.2%), Noida (20.6%), and Bengaluru (18.8%) witnessed the highest QoQ growth in residential demand while Delhi (10.8%), Bengaluru (6.7%), Gurugram (6.6%), Chennai (5.1%) and Kolkata (5.1%) exhibited maximum QoQ growth in supply. 

Market-wise Findings 

Bengaluru 

The residential demand in Bengaluru  observed a substantial growth with an increase of 18.8% QoQ while the supply observed a growth of 6.7% QoQ. There was a continued preference for bigger homes with 3BHK constituting 49% of the total demand and 43% of the total supply.  

Chennai 

The  residential market  in Chennai has been driven by an increasing demand near the coastal areas due to the presence of IT corridors and employment hubs. The demand grew 13.0% QoQ while the supply grew 5.1% QoQ with an increase of 1.6% QoQ in the average property rates. Homebuyers in the city seem to have a strong preference for mid-segment and premium properties over affordable housing. 

 Delhi 

The residential demand in Delhi  grew nearly 1.5 times with an increase of 47.2% QoQ with a preference for mid-segment localities while the supply increased to 10.8% QoQ. Property prices also witnessed a QoQ increase of 2.5%. The residential market was dominated by 2BHK and 3BHK, which constituted a total of 82% of the demand share. In Noida and Greater Noida,the aggregate demand for residential markets witnessed a 19.3% QoQ growth, whereas supply declined by 1.6% QoQ and average prices increased by 3.1% QoQ. 

Ahmedabad 

The   residential market demand in Ahmedabad increased to 21.4% QoQ while supply increased by 4.7% QoQ; average prices increased 1.6% QoQ. The 3BHK units continue to hold a majority share in the market with demand and supply of 45% and 46% respectively; decline in the demand for premium properties to 12%  in Q2, 2022. 

 The Kolkataresidential market was driven by demand for affordable properties. The demand grew 21.2% QoQ while the supply grew 5.1% QoQ. The average property rates also increased 1.7% QoQ; 2 and 3 BHK configurations accounted for 87% of the total demand as well as supply. 

Mumbai  

 Demand in Mumbai’s residential market increased 16.5% QoQ owing to an increase in the demand in the western suburbs while supply increased by 4.5% QoQ; average prices increased 1.2% QoQ. The demand and supply for 2BHK configuration constituted 43% and 44% respectively in Q2, 2022. 

Pune 

Pune displayed a sharp increase in demand , up from 3.9% in Q1, 2022 to 8.1% in Q2, 2022 and the average prices  rose from 0.5% in the previous quarter to 1.3% in Q2, 2022. Supply showed a reverse trend , declining From 2.2% to -2.0% in the current quarter. 

Hyderabad 

The residential supply in Hyderabad continued to decrease even in Q2 2022 in the face of regulatory changes. It is encouraging to see that the State Government has introduced measures to monitor malpractices in the sector. Overall, the residential demand was largely stable (0.2% QoQ growth), while the average rate increased by nearly 3%. 

Conclusion  

While the cumulative demand registered a YoY increase of 27.7%, the cumulative supply grew 16.2% YoY. Pan-India prices increased 2.4% QoQ and 8.0% YoY, reflecting the resilience of the housing markets vis-a-vis other real estate assets . 

Prices of ready-to-move properties increased 2.3% QoQ and 6.4% YoY. Greater Noida, Thane, Delhi, and Ahmedabad witnessed the highest QoQ rate rise of 4.0%, 3.7%, 2.8%, and 2.6% respectively. Prices of under-construction properties increased 2.7% QoQ and 13.3% YoY nationally. Prices in Noida, Hyderabad, Gurugram and Gr. Noida increased 7.3%, 5.0%, 4.4%, and 3.4% QoQ respectively 

The rise in residential demand across 13 cities is reflective of economic recovery and income stabilisation. This is also fuelled by families returning to metros as offices and educational institutions reopen. Sudhir Pai, CEO, Magicbricks firmly believes that despite growing inflation, disruption of global supply chains and increase in material and mortgage rates, residential market is likely to continue growing over the next few quarters. 

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