Housing sales up 5%, office demand grows 18% during Q2 across top 8 cities: Knight Frank

New Delhi: Housing sales rose 5 per cent while gross office leasing increased 18 per cent annually during July-September across eight major cities as demand stayed strong for premium homes and workspaces, according to Knight Frank.

Real estate consultant Knight Frank India on Thursday released its report 'India Real Estate' for the third quarter of 2024 calendar year through a webinar.

As per the data, housing sales rose 5 per cent during July-September to 87,108 units across eight cities from 82,612 units in the year-ago period. Gross leasing of office space grew 18 per cent to 19 million square feet from 16.1 million square feet, driven by high demand from multi-national companies wanting to set up Global Capability Centres (GCCs).

Knight Frank's report shows a modest increase in housing sales during July-September, in a complete contrast to data provided by Anarock and PropEquity which reported a drop in total sales during July-September.

"Momentum in the residential market has trended up well in 2024 with Q3, 2024 recording the highest quarterly sales this year at 87,108 units," Knight Frank said in the report.

Addressing a virtual press conference, Knight Frank India CMD Shishir Baijal said, the growth in housing sales is driven by demand for premium housing costing above Rs 1 crore each.

"There are concerns in affordbale housing segment," Baijal said, adding that sales in this category have declined due to availability and affordability challenges.

As per the report, housing sales have grown across all markets except for the Delhi-NCR where sales have dipped by 7 per cent YoY (year-on-year).

The highest sales volumes were recorded in Mumbai at 24,222 units, which is a new high for the market. Sales in Mumbai grew 9 per cent year-on-year.

Among the larger markets, sales grew the most in Bengaluru at 11 per cent YoY with 14,604 units.

Housing sales in Pune were up 1 per cent to 13,200 units, while demand in Hyderabad grew 9 per cent to 9,114 units.

Ahmedabad saw an 11 per cent growth in sales to 4,578 units, while Kolkata witnessed a 14 per cent growth in sales to 4,309 units.

Housing sales in Chennai increased 6 per cent to 4,105 units.

However, sales of residential properties in Delhi-NCR declined 7 per cent to 12,976 units during July-September as compared to the year-ago period.

On office demand, Knight Frank said the gross leasing of workspace in Bengaluru jumped more than two-fold to 5.3 million square feet from 2.1 million square feet.

In Delhi-NCR, the office demand grew 26 per cent to 3.2 million square feet from 2.5 million square feet.

The leasing of office space in Chennai increased 35 per cent to 2.6 million square feet from 1.9 million square feet.

Ahmedabad saw a growth of 69 per cent in demand to 0.3 million square feet from 0.2 million square feet.

However, the office demand in Mumbai fell 17 per cent to 2.7 million square feet from 3.2 million square feet. In Pune, the leasing declined 14 per cent to 2.6 million square feet from 3 million square feet.

In Hyderabad, the office demand decreased 26 per cent to 2.2 million square feet from 2.9 million square feet.

The gross leasing of office space in Kolkata was down 38 per cent to 0.18 million square feet during July-September 2024 from 0.3 million square feet in the year-ago period.

The consultant noted that the GCCs took 7.1 million square feet, the largest share of the transactions' pie, accounting for 37 per cent share in the total leasing during July-September quarter of 2024.

"India-facing businesses and GCCs have continued to expand operations, remaining the primary drivers of increased volumes. We expect this trend to continue for the rest of the year, with the possibility of office leasing numbers crossing 70 million sq ft by the end of 2024 -- an astounding 10 million sq ft increase, or a 20 per cent growth over the previous high. This exceptional growth underscores India's position as a thriving global business hub," Baijal said.