Sales of homes showed a weak trend in the first half of 2023, with 1.57 lakh units sold in the top eight cities in the country, down 1.3 per cent year-on-year, Knight Frank India said in a report on the real estate sector.
Mumbai, which accounted for over a fourth of the volume, saw the most decline at 8 per cent followed by Ahmedabad and Bengaluru.
Launches rose about 8 per cent in January to June and sales as a percentage of launches were about 90 per cent in the period under review, compared to 99 per cent a year ago. Interestingly, inventory has been coming down with the number of quarters to sell falling to 6.7 from 7.8 a year ago. Unsold inventory at the end of June 2023 has seen a fall of 7 per cent from year ago.
The share of affordable homes in the overall sales volume has seen a substantial dip to 32 per cent in H1 2023 from 40 per cent a year ago. This is due to rising home prices as well as borrowing rates that have made homes unaffordable to this segment.
All the cities in the survey saw a rise in prices both over a 12-month period and a six-month period. Hyderabad saw the most price rise at 10 per cent in a year, followed by Mumbai at 6 per cent and the National Capital Region and Bengaluru at 5 per cent.
Office Subdued
The slowdown in the US and Europe has resulted in subdued office leasing and in the first half of 2023 most cities saw a dip in activity, with the exception of Chennai, the National Capital Region and Mumbai. Leasing during the period was at 26 million square feet, up 3 per cent on year. Bengaluru, the hub of IT multinationals, saw a 10 per cent dip in lease transactions. The electronic city accounted for 27 per cent of lease transactions across the eight major cities.
New office completions in the period fell 25 per cent to 18 msf. Real estate developers are waiting to see how the economy plays out in the US and Europe before they start adding to new space. The lower supply means that vacancy levels have seen a marginal dip from year ago. There was very little movement in lease rents during the six-month period across most cities, except for Kolkata.