The top eight residential markets in the country continue to display robust growth, in the period Q3 2023 (July-September). Sales of 82,612 residential units marked a 12% year-on-year (Y-oY) increase during this time period. Knight Frank India’s latest report on the India’s real estate market indicates that Q3 2023 registered the highest quarterly sales in six years.
Mid- and high-end residential properties experienced strong sales momentum in this period. Properties priced over $1 core experienced a 39% year-over-year increase, while properties priced between $50 lakh and $1 crore experienced a 14% increase.
The affordable segment, which includes homes under 50 lakh, however, declined by 10% Y-o-Y.
In response to this surge in demand, developers launched new projects in Q3 2023, adding 85,549 new housing units, which increased by 23% year-over-year. As a result of the growing demand, prices in various markets in India also increased, with Hyderabad experiencing the biggest price hike at 11%, mainly due to an increase in premium properties.
According to Shishir Baijal, chairman and managing director of Knight Frank India, the India’s residential real estate market is showing strong growth with high sales. However, there has been an increase in inventory as developers are launching new projects to meet this demand. Nevertheless, the overall market is improving with a steady pace of sales. While higher interest rates and prices have not affected buyers in the luxury segment, the affordable housing sector has been hit hard. This calls for additional measures to stimulate demand and improve viability for developers.
Mumbai is the most active market for office space uptake, up 17% Y-o-Y
During Q3 2023, India’s leading eight markets experienced robust activity in the office space market, with a total of 16.1 million square feet transacted and a 17% year-on-year increase. This demonstrates the trust of occupiers in India’s steady economy despite uncertainty on a global scale. The majority of office transactions (44%) were from global corporations, primarily through Global Capability Centres (GCC), showcasing their strong commitment to their Indian operations. Additionally, domestic businesses and Indian corporations also made a substantial impact, accounting for 37% of transactions and totaling 6 million square feet.
Mumbai was the most active office market during Q3 2023, with 3.2 million square feet of transactions, representing 20% of the total. Hyderabad (46%) and Bengaluru (35%) led the new office completions. In the quarter, Mumbai had the highest rental rates of 113/square foot/month, while Kolkata saw the highest rental appreciation of 10%.
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