Knight Frank India has released ‘Outlook Report’ which highlights top trends for 2022. Report predicts capital value growth of 5% in residential sector and upswing in office space and warehousing supported by higher demand by IT companies and e-commerce platforms.
Note of caution-
The report highlights the fact that the recovery we have seen so far is skewed with the organised sector gaining at the cost of unorganised sector and large companies at the cost of smaller players. Sectors like Information Technology are reporting healthy growth but other sectors like automobiles and retail continue to struggle.
Residential sector recovery-
Report states, unsold inventory in residential sector after peaking in 2014 is now at the lowest level. This has been made possible with the improvement in buyer perception towards home buying and the price trajectory which has stabilised the prices in the sector.
Residential Sector Capital Value Growth-
Supply side factors like construction cost, land price, developers and financial institution’s sentiments and demand side factors like household income, affordability, consumer sentiment will put upward pressure on housing prices and will increase the prices by around 5%.
Key Findings in residential sector-
- In cities like Mumbai, Kolkata, Pune, Bengaluru stamp duty cuts have helped reignite the demand in the market.
- In cities like Ahmedabad, Bengaluru, Pune, Hyderabad and Mumbai buyers rate access to green areas higher than ever. Apartments and gated communities with open spaces are higher in demand after the pandemic.
Upswing in office space-
In cities where IT companies have a huge presence are reporting higher demands, as top five IT companies have hired approximately 2,60,000 employees in past one year, which in a way will increase the demand by 11.67 mn sq. ft.
Average rents in Mumbai, Ahmedabad, Pune and Kolkata have decreased by 4% to 7% year on year basis. They are expected to stabilise in the year 2022.
Other Key Findings-
Knight Frank Report says, e-commerce will drive warehousing market and co-working spaces will see revival after the initial setback during the pandemic.