In another sign towards recovery in the real estate market, realty consultancy firm Anarock has said that the January-March 2022 quarter saw the highest supply of residential units in the last six years. They were at 89,140 units in January-March 2022 as compared to 73,760 in the previous quarter.
The report said that the sales during January-March 2022 were also the highest since 2015. They were 99,550 in the first quarter of the current calendar year, up from 90,870 in October-December 2021. The share of 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 takes hold, developers are on a launch spree. The increase in new launches is expected to boost sales in the coming quarter. The prices of raw materials have increased significantly in the last one year which may lead to increase in property prices in future. Geopolitical tensions between Russia and Ukraine may also escalate. As per the Anarock report, developers may go slow on these launches, amid rising costs and declining earnings for affordable segment homebuyers.
It said, “RBI is expected to increase the repo rate in the next few months as inflation is at a high level. Developers need to be cautious with high unsold inventory. Project execution is critical to ensure cash flow. Work.” Demand for larger homes remains strong amid From Home and Hybrid work policies. Peripheral areas continue to gain traction to control costs.”
In the commercial space too, the new completions saw a significant increase from 9.3 million sq ft in the December 2021 quarter to 19.7 million sq ft in the March 2022 quarter.
“With the pandemic easing and business resuming, new office completions and absorption could increase significantly in 2022. The pandemic-induced lockdown has led to an increase in offices in Tier II and III cities. This growth is likely to continue in the coming years as companies look to decentralize operations. REITs in India have given good returns and given an exit opportunity to the investors. Amidst this backdrop, investment in commercial office property is likely to increase in the future period,” said Anarock.
It added that the focus would be on environmental, social and governance (ESG)-focused individuals and with investors to make long-term business decisions. The new office development will be designed to support tech-enabled administration and other functions. The IT-ITES sector may dominate the leasing activity in 2022.
On the retail segment, it said, “With no restrictions on trade, there could be a significant increase in new mall completions and absorption in 2022. With the rise of e-commerce, many retailers are looking to increase efficiency and reduce delivery times. Will look at setting up micro fulfillment centers for micro-fulfillment centers. Adoption of omni-channel will be the key to attract and retain customers by providing them with an engaging shopping experience.”
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