Home sales in India’s eight major residential markets grew by 40 per cent to 232,396 units in the first nine month of 2022, compared to 163,426 units in the same period a year ago, property consultant Knight Frank India said in a report.
The report said that Mumbai, Bengaluru, and the National Capital Region (NCR) saw highest home sales in the third quarter of 2022.
Home sales grew at an annual rate of 15 per cent to 73,691 units across the top eight cities in the third quarter (Q3) of 2022 from 64,010 units in the corresponding period a year ago.
Frank India’s real estate update for July–September 2022 also showed that there has been a 20 per cent increase in quarterly average sales from the pre-pandemic period of 2019. However, sales dipped 8 per cent from the prior quarter.
Shishir Baijal, chairman and managing director, Knight Frank India, says, “All real estate asset classes have been on the recovery path over the past few quarters; however, the recovery in the residential segment was the swiftest and most substantial. While the increasing interest rates will impact affordability, the underlying need for homeownership remains strong.”
The Reserve Bank of India’s (RBI ) latest repo rate hike would lead to a significant rise in funding cost across all buying categories, he noted.
“Tight liquidity conditions along with the repo rate hike would lead to a significant rise in the cost of funding, impacting home loan rates as well. Going by the current trends we expect about 50 per cent of this will be passed onto the home loan borrowers,” adds Baijal.
Mumbai’s home sales of 21,450 units accounted for 29 per cent of the total sales across the top eight markets. Bengaluru sold 13,013 units in Q3, 2022, logging the second-largest sale volume. The Delhi NCR sold 11,014 units during the period.
"We do not believe that home loan rates approaching 2019 levels will be enough to subdue market momentum significantly. The performance of the broader economy and homebuyer sentiment will have a greater bearing on market traction for the remainder of the year as it dictates homebuyer income levels and demand much more directly," added Baijal.
The report further noted that all markets saw average price increase of 3-10 per cent YoY (Year-over-year) during the period. It also marks the third quarterly consecutive YoY growth in prices across all markets