Uptick in Realty Sector: Residential Unit Supply During March 2022 Quarter Highest in 6 Years
Uptick in Realty Sector: Residential Unit Supply During March 2022 Quarter Highest in 6 Years
Residential unit sales during January-March 2022 were also the highest since 2015; they stood at 99,550 in January-March 2022, against 90,870 in October-December 2021

In yet another signal toward a recovering real estate market, realty consultancy firm Anarock has said the January-March 2022 quarter witnessed the highest supply of residential units in the past six years. They stood at 89,140 units in January-March 2022, compared with 73,760 in the previous quarter.

The report said the sales during January-March 2022 were also the highest since 2015. They stood at 99,550 in the first quarter of the current calendar year, against 90,870 in October-December 2021. The share of the Mumbai Metropolitan Region (MMR) and Hyderabad in new launches increased to 51 per cent in the first quarter of the current calendar year, from 46 per cent a quarter ago.

As COVID-19 receded, developers are on a launch spree. Sales are likely to increase in the coming quarter on the back of a rise in new launches. Prices of raw materials have increased significantly in the past one year which may lead to an increase in property prices in future. Geopolitical tensions between Russia and Ukraine may also fuel a further increase. Amidst a rise in input costs and declining income of affordable segment’s homebuyers, developers may go slow on these launches, according to the report by Anarock.

It added, “The RBI is expected to increase repo rate in next couple of months as inflation is at the higher side. Developers need to be cautious with high unsold inventory. Project execution is critical to ensure cash inflow. Demand for larger homes to remain robust amidst the work-from-home and hybrid work policies. Peripheral areas continue to gain traction to contain the cost.”

In the commercial space also, new completion saw a significant increase from 9.3 million square feet in the December 2021 quarter to 19.7 million square feet in the March 2022 quarter.

“With pandemic receding and business resuming, new office completions and absorption may increase significantly in 2022. Pandemic-induced lockdown has led to an increase in offices in the tier II and III cities. This growth is likely to continue in the years to come as companies look to decentralise operations. REITs in India have given good returns and provided exit to the investors. Amidst this backdrop, investments in commercial office assets are likely to increase in the future periods,” Anarock said.

It added that the focus on environmental, social and governance (ESG) to increase with occupiers and investors making informed long-term business decisions. New office developments will be designed to support tech-enabled administration and other functions. The IT-ITeS sector may continue to dominate the leasing activity in 2022.

On the retail segment, it said, “With no restrictions on business, new mall completions and absorption may increase significantly in 2022. With the rise of e-commerce, many retailers will consider having micro fulfillment centres to increase efficiency and reduce delivery timelines. Omni-channel adoption will be the key to attracting and retaining customers by providing an immersive shopping experience.”

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