Residential demand in key Indian cities rises by 16.9% QoQ in April-June: Report
Facing three waves of global contagion and multiple lockdowns, the Indian housing markets are becoming resilient over time. In the second quarter of 2022 (Q22022), the aggregate demand (searches) in key Indian cities jumped by about 16.9% quarter-on-quarter (QoQ) & 27.7% year-on-year (YoY), while the cumulative supply (listings) witnessed growth of 2.9% QoQ & 16.2% YoY, as per Magicbricks’ latest PropIndex Report for Q2, 2022.
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.
“The rise in residential demand across 13 India cities is reflective of economic recovery and income stabilisation. This is also fuelled by families returning to metros as offices and educational institutions reopen. While growing inflation, disruption of the global supply chain and increase in input cost of materials & mortgage rates are pushing up the prices, overall we are seeing buyer’s confidence and expect India’s residential market to continue growing over the next few quarters as well,” said Sudhir Pai, CEO, Magicbricks.
Regardless of the headwinds created by the multiple waves of Covid-19, Magicbricks Research anticipates a stable growth curve for India’s residential sector throughout 2022.
Market-specific takeaways from Magicbricks’ Propindex Report Q2, 2022:
1) Bengaluru’s residential demand 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.
2) Chennai’s residential market 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.
3) Delhi’s residential demand 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.
4) Ahmedabad’s residential market demand 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.
5) Kolkata’s residential 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.
6) 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.
7) Pune displayed a sharp increase in demand (from 3.9% in Q1, 2022 to 8.1% in Q2, 2022) and the average prices (from 0.5% in the previous quarter to 1.3% in Q2, 2022). Supply showed a reverse trend (From 2.2% to -2.0% in the current quarter).
8) In Hyderabad, residential supply 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%.