Why 2022 Is the Year of Residential Real Estate?
Despite the pandemic, the residential real estate market is booming, with homes being sold like hotcakes. The housing segment in the best cities of India remained overly optimistic. Demand for residential real estate in the leading cities of India increased with the pandemic caused by COVID-19. The pandemic and the consequent closure caused an intense desire among the people to own a home. In addition, the pandemic served as a reminder that the human house is the safest place in difficult times.
According to Knight Frank’s latest market assessment report, quarterly sales in the first quarter of 2022 exceeded 78,627 residential units despite the third wave. Mumbai recorded the most significant sales volume of 21,548 units in the first quarter of 2022. Delhi-NCR recorded the highest annual growth in new home sales, at 123 percent. Bangalore ranks third in terms of residential sales; it had an annual growth of 34% in the first quarter of the year; it sold a total of 13,663 new units. The report also concluded that all the leading real estate markets witnessed an increase in the value of residential equity due to growing demand among home buyers.
2022 and Residential Real Estate
Speaking about the bright prospects of the residential real estate sector, the CEO of Smartworld Developers Pvt noted that 2022 started with a high note for the real estate industry. Developers and buyers expressed remarkable enthusiasm. Pandemic recovery is increasing the availability of buyers day by day as their finances are restored. In addition, the industry will continue to benefit from a low-interest rate regime; With an infrastructure initiative implemented by the government. There is an increase in the input cost of basic materials such as steel, cement, and other critical raw materials. Hence, many expect that the cost of capital for apartments will increase from 5% to 12%.
In 2022, prospective home buyers will prefer larger homes; Better amenities, a comprehensive ecosystem of life, and an idyllic location. Also, it will positively affect the demand in the housing segment. That is why 2022 will be the year of residential real estate; Dominated by millennial homebuyers who invest in real estate.
According to the data, quarterly sales in the top seven cities of India were up 99,550 units in the first quarter of 2022. This represents a 71% increase from about 58,290 units sold annually in the first quarter of 2021. The two dominant real estate hotspots, NCR and MMR, accounted for more than 48% of total sales in the top seven cities. NCR increased by 114% annually. Many factors influence the real estate market amid tasting caused by the COVID-19 pandemic. In addition, historically low housing loan interest rates help real estate developers offer a wide range of choices at attractive prices. Also, government-sponsored subsidy programs also increase the enthusiasm of home buyers.
Predictions – What to Expect
According to the managing director of Krisumi Corporation, favourable interest rates, hybrid mode of operation, and pandemic led to an understanding of the need for one’s own home; As the primary purpose of life, attractive prices and pro-government policies will continue to boost sales momentum in residential real estate markets. Mortgage rates are historically the lowest. They played an essential role in helping home buyers turn their demands into actual purchases.
The real estate sector brings enormous benefits and opportunities such as stability, future security, guaranteed returns, etc. It currently attracts home buyers who are planning for a secure future. Therefore, the real estate sector has become buyers’ and investors’ most preferred investment choice. According to the industry report, the real estate sector is considering a capital increase of around 5% in the residential segment this year. Given the positive outlook for the real estate sector, it is advisable to consider that the Indian housing sector will perform exceptionally well in 2022.