Despite headwinds of economic slowdown, the Indian real estate sector recorded overall growth in 2019, Knight Frank India said in its latest report released on Tuesday.
The residential segment in top eight cities demonstrated unexpected resilience and recorded a marginal growth of 1 per cent year-on-year in sales volume.
Total sales volume was recorded at 245,861 units in 2019 over 242,328 in 2018 as affordability improved and developers aligned themselves with the needs of home-buyers by reducing ticket-sizes and unit-sizes in a bid to encourage sales.
New residential unit launches rose by 23 per cent year-on-year in 2019 to be recorded at 223,325 units.
The office market recorded its historic best year in terms of transaction volumes in 2019, recording 60.6 million square feet, backed by a surge in leasing activity by the information technology segment.
New completions surged by 56 per cent in 2019 and was recorded at 61.3 million square feet, marginally surpassing demand.
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"The historic rise in the office transactions is a significant growth indicator for the office market as it represents the continued commitment of domestic and global corporations in the country's growth potential despite the ongoing economic slowdown," said Shishir Baijal, Chairman and Managing Director of Knight Frank India.
Economic headwinds such as slower GDP growth, reduced industrial output and poor consumer sentiments among others presented significant challenges to the residential market throughout the year.
"However, the slew of recent fiscal and monetary incentives by the government and Reserve Bank of India seems to have had an arrestive impact on the real estate sector," said Baijal.
The GDP growth is expected to start recovering and touch 6 to 6.5 per cent by FY21. Consequently, the real estate sector growth should also maintain its momentum.
While the office space is expected to sustain demand, increasing supply could weigh on rents and vacancy levels. Liquidity constraints and home-buyer sentiments will continue to keep buyers tentative in the residential segment," said Baijal.
"Thus, even maintaining this new-found stability in demand, will need a commitment from all stakeholders in the residential market," he added.
The flagship report titled India Real Estate: H2 2019 is the 12th edition of the report. It presents a comprehensive analysis of the residential and office market performance across eight major cities for the July to December 2019 (H2 2019) period.
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