Housing prices may rise 5% during 2022 on improved demand: Report

Housing prices may rise 5 per cent next year on improved demand, according to Knight Frank India.

In its '2022 Outlook Report', the property consultant said: "While 2021 was mostly impacted by the volatility due to the pandemic, 2022 may prove to be a more stable year for the sector both for commercial as well as the residential sector."

On the housing segment, the report said that sales momentum is expected to continue in 2022 as prospective homebuyers' preferences for bigger homes, better amenities, and attractive pricing will keep them interested to seal the deals.

"After facing a series of structural reforms like demonetisation, GST, and RERA during the last decade, the pandemic arrived as another blow for the real estate sector. Our decadal analysis of the 2011 to 2021 period indicates many of the supply and demand-side factors have started putting upward pressure on house prices and as a result, we project around 5 per cent price increase in 2022," it added.

 

Shishir Baijal, Chairman and Managing Director at Knight Frank India, said the real estate sector recorded a smart recovery despite the pandemic exigencies in 2021 with segments like residential outperforming others.

"The disruption caused by the pandemic is slowing settling and the real estate market is expected to gain back its rhythm in the next two to three quarters, albeit, the threats of the new variant is adequately contained with minimum disruption in the early part of the new year. Should we be able to continue at this pace, the real estate sector will see an adequate recovery to match or indeed cross the pre-pandemic levels," he said.

Knight Frank said that the top five IT companies' incremental demand for office space based on robust hiring in the last eighteen months is estimated at 11.67 million square feet, spread out over the next one to two years.

"Co-working sector will benefit as pandemic reinforces the need for agility like never before. Agility, a keyword associated with the co-working sector, will drive the demand rebound for flexible office spaces despite the return of normalcy. The recovery in the office sector and flight-to-quality trend is expected to keep rents stable to increasing in 2022," the report said.

Transactions for the warehousing segment, riding on the boom of the e-commerce sector, is projected to grow at a CAGR (compound annual growth rate) of 20 per cent from 31.7 million square feet in the financial year 2021 to 45.9 million square feet in the financial year 2023.

Indian data centre market currently houses an estimated 445 MW of critical IT capacity, and with a significant approximate 290 MW addition in 2022, the total count will scale up to 735 MW by end of next year.