Home prices have become more costlier in the first half of 2024, with a nearly 6 per cent rise pan-India, while office rentals have also moved up 1-5 per cent across the top eight cities, according to Knight Frank India.
Over 12 months prices have increased 1-9 per cent, with Bengaluru seeing the most increase and Ahmedabad the least. This is the fifth consecutive half-yearly period of price increase in all the cities, according to the property consultant.
Mumbai, of course, has the most expensive real estate and prices increased by 4 per cent in the first half of 2024 after increasing 7 per cent last year.
The increase in prices has had an impact on the residential sector, with a higher growth in premium homes compared to those priced lower, as affordability has become an issue for those buying in the lower-priced bracket.
The report showed that sales of houses priced over ₹1 crore grew 51 per cent on year in the first half, compared to an 8 per cent drop in those priced in the range of ₹50 lakh to 1 crore and 6 per cent drop in those priced below ₹50 lakh.
In fact, lower priced houses, have been hit considerably by rising prices as well as higher mortgage rates. “Increasing prices, higher home loan rates and the comparatively adverse impact of the pandemic on homebuyers in this segment continued to weigh on demand,” the report said.
The report showed that in the period January to June 2024 home sales rose 11 per cent year over year to 1.73 lakh units. In the June quarter home sales rose 12 per cent to 86,896 units. Half-year launches rose 6 per cent to 1.83 lakh units while in the quarter they were 5 per cent higher at 90,147 units.
Total unsold inventory at the end of June was 4.84 lakh units, 3 per cent higher than a year ago, with a number of quarters to sell at around 6. “The QTS level of the premium category depicts a healthier image at 5.1 quarters, clearly showing that the rising inventory in this segment is still not a pressing issue for the residential market,” the report said.
In the office sector rentals are trending higher due to a supply squeeze. Chennai and Bengaluru experienced the maximum annual rental growth at 9 per cent and 7 per cent respectively in H1 2024.
Pan-India leasing rose by a third to 34.7 million square feet during the first half and 25 percent to 18.5 million square feet in the June quarter. New supply in the half year was 39 per cent higher at 25 msf, but in the June quarter there was a 10 per cent decline in new completions.
Bengaluru, the IT capital of India, is an important office market being home to leading global technology companies. It accounted for about a fourth of overall leasing in the first half. “This increase can be largely attributed to the establishment of GCCs by corporates looking to expand long-term operations in the market,” Knight Frank said.
The average transacted monthly rentals for office space in Bengaluru increased by 7 per cent to ₹88.7 psf in H1 2024.