The strong growth in India's residential real estate market continues unabated, with sales in the top eight cities hitting an 11-year high in the first half of 2024.
According to data from real estate consultancy Knight Frank, total sales in the top eight cities—Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, National Capital Region, Mumbai, and Pune—rose 11 per cent year-on-year to 1,73,241 units, between January-June this year.
Much of this demand continues to be driven by sales in the premium segment, homes priced above Rs 1 crore.
With 20,795 units sold, NCR had the highest volume of sales in the premium segment among the top 8 cities. Mumbai and Bengaluru followed with 14,699 and 13,698 units sold respectively.
The premium segment of Rs 1 crore and above saw a significant uptrend accounting for 41 per cent in the first half of the year, up from 30 per cent a year ago.
In contrast, the affordable segment (homes priced Rs 50 lakh and below) has shrunk to 27 per cent from 32 per cent.
Developers are also ramping up supplies in the wake of the strong housing demand. The 1,83,401 units launched were at a 10-year high in terms of units launched in a half-yearly period, said Knight Frank.
The premiumisation of the market is observed in demand as well as supply where the share of launches in the Rs 1 crore plus has seen a corresponding rise in the first half of the year, pointed Gulam Zia, senior executive director - research advisory, infrastructure and valuation at Knight Frank India.
"While we appreciate the rise in the premium sector, the corresponding decline in the lower price categories should be addressed to ensure that there is more inclusive growth of the market," he opined.
All the eight cities saw home prices rising on a 12-month basis, with Ahmedabad seeing the least increase at 1 per cent and Bengaluru the highest at 9 per cent.
The office market also had the best half yearly period in terms of transactions. The top eight cities saw office transactions of 34.7 million square feet between January-June, up 33 per cent from a year ago.
Bengaluru led the Indian office market with 8.4 million square feet of transactions in the first half recording a 21 per cent year-on-year growth.
Global Capability Centres (GCC) recorded an increase of 48 per cent in transaction volumes to 9.8 million square feet from 6.6 million square feet, a year ago.
With India's economic growth expected to remain strong, both the housing and office market is expected to continue to report strong traction.
"India has consistently maintained its status as one of the fastest-growing large economies which has positively impacted the office demand. Given the strong economic momentum and the improving global growth outlook, coupled with the trend of higher absorption in the second half of the year, we can confidently anticipate that the Indian office market will conclude 2024 on a record high," said Viral Desai, senior executive director, occupier strategy and solutions, industrial and logistics, capital markets and retail agency, Knight Frank India.
