Q1 2024 witnessed a 9% increase in home sales and a 43% rise in office leasing across India’s top eight cities, according to Knight Frank India.

India’s real estate sector has demonstrated remarkable resilience amidst global challenges, as evidenced by the latest quarterly update from Knight Frank India. Let’s delve into the key highlights of the sector’s performance in Q1 2024 and analyze the factors driving its growth.

1. Robust Home Sales and Office Leasing: Q1 2024 witnessed a noteworthy surge in both home sales and office leasing across India’s top eight cities. According to Knight Frank India’s report, home sales recorded a 9% increase, while office leasing experienced an impressive 43% rise compared to the previous year. This upward trend underscores the enduring demand for residential and commercial properties in the country.
2. Mumbai Leads in Home Sales: Among the major cities, Mumbai emerged as the front runner in home sales growth, registering a remarkable 17% rise in Q1 2024. Hyderabad and Pune followed closely behind, showcasing robust demand for residential properties in these markets. However, the National Capital Region (NCR) and Bengaluru reported mixed results, indicating varying dynamics across different regions.
3. Office Leasing Dynamics: Hyderabad and Pune emerged as the top performers in office leasing, with staggering growth rates of 261% and 146% respectively. This surge in demand for office spaces reflects the buoyancy in India’s commercial real estate market, driven by factors such as increasing investments and the growth of technology and outsourcing industries.
4. Supply and Demand Dynamics: While demand for homes and office spaces remains strong, there are concerns regarding the supply-demand dynamics. Limited new office supply has led to a shortage of available spaces, resulting in a marginal reduction in vacancy levels and an uptick in office rents in cities like Bengaluru, Mumbai, and NCR. Similarly, the residential market is grappling with inventory depletion, despite a rise in new launches.
5. Price Trends and Market Sentiment: The residential market witnessed a shift towards higher-priced properties, with sales in the over ₹1 crore segment gaining traction. This trend is indicative of rising property prices in certain markets. Meanwhile, anticipation of a reduction in interest rates in the latter half of the year is expected to bolster sentiment in both residential and office markets, further driving demand. India’s real estate sector has displayed resilience and adaptability in the face of global challenges. The robust performance of home sales and office leasing in Q1 2024 underscores the sector’s pivotal role in driving economic growth and urban development. As the year progresses, continued government support, coupled with favorable market conditions, is poised to sustain the momentum and propel India’s real estate sector towards new heights of success.