Residential Real Estate Booms, Ultra-Luxury Sector Slips, Flex Spaces Rise
Mumbai's home sales hit a 13-year high in 2024, while a new report highlights various trends in the real estate market across major Indian cities. The report by Knight Frank India provides a comprehensive overview of residential and office space dynamics.
Residential Real EstateLuxury SegmentFlex SpacesOffice MarketKnight Frank IndiaReal Estate MumbaiJan 08, 2025
Sales in the second half of 2024 rose by 6% year-on-year (YoY).
This trend is not unique to Mumbai; other major cities like Hyderabad and Pune also achieved record highs in 2024.
However, the Delhi-NCR region experienced a slight decline, with sales dropping by 4% YoY for both annual and semi-annual periods.
These findings are part of a comprehensive report by Knight Frank India, which analyzed the residential and office space scenarios across eight key cities Delhi-NCR, Mumbai, Ahmedabad, Kolkata, Bengaluru, Chennai, Hyderabad, and Pune.
The residential real estate market in India has shown remarkable growth since the pandemic.
Higher savings during the lockdown, stable incomes in middle and upper-income groups, household wealth creation, and the country's strong economic performance have all contributed to this surge.
Primary market sales have increased at an annualized rate of 23% since 2020.
In 2024, annual sales volumes hit a 12-year high, with 3.5 lakh units sold, marking a 7% YoY growth.
The second half of 2024 saw the sale of 1.8 lakh units, representing a 3% YoY increase.
The luxury segment, defined by units priced above Rs 1 crore, accounted for 27% of sales, with a 15% YoY growth.
The segment priced between Rs 2 crore and Rs 5 crore led the way with a 62% YoY surge, increasing its share from 10% in H2 2023 to 15% in H2 2024.
Conversely, sales in the ultra-luxury segment above Rs 50 crores and in the lower price categories of under Rs 50 lakh and between Rs 50 lakh to Rs 1 crore saw a dip in volume.
Developers launched 3.7 lakh units in 2024, the highest in 11 years, resulting in increased unsold inventory.
Despite this, the quarters-to-sell (QTS) metric improved to 5.8 quarters, indicating healthy market fundamentals.
Even in the high-value segment of Rs 2 crore to Rs 5 crore, QTS levels stood at 3.9 and 4.2 quarters, respectively.
In the office market, transaction volumes reached 6.68 million sqm (71.9 million sqft) in 2024, a 19% increase over the previous high in 2019.
Bengaluru, NCR, and Mumbai, which contributed 57% of the total transacted area, were the key drivers of growth.
Bengaluru led with 0.90 million sqm (9.7 million sqft) transacted in H2 2024.
Pune and Ahmedabad also achieved record annual transaction volumes, while Chennai saw a decline due to a high base effect and constrained supply.
India-facing businesses accounted for 36% of total transacted volumes in 2024, while Global Capability Centres (GCCs) contributed 31% of transactions.
The flexible office space segment witnessed a significant hike, with a 52% YoY growth.
Flex operators took up 1.47 million sqm (15.8 million sqft), driven by the increasing number of small businesses opting for co-working spaces.
Co-working spaces dominated, constituting 68% of flex transactions, up from 58% in 2023.
H2 2024 saw a 138% YoY surge in flex space absorption to 0.8 million sqm (8.6 million sqft).
Office completions totalled 2.34 million sqm (25.2 million sqft) in H2 2024, slightly down 1% YoY.
Vacancy rates dropped from 17.2% in H2 2021 to 15% in H2 2024, with NCR and Chennai recording the lowest vacancies at 8.4% and 6.8%, respectively.
Limited supply and high demand pushed rents up by 3-7% YoY, with Hyderabad leading at 7%, followed by Bengaluru and Chennai at 6% each.
Frequently Asked Questions
What was the key trend in Mumbai's residential real estate market in 2024?
Mumbai's home sales hit a 13-year high in 2024, with 96,187 units sold, reflecting an impressive 11% increase compared to the previous year.
Which segment of the residential market saw the most significant growth in 2024?
The segment priced between Rs 2 crore and Rs 5 crore saw a 62% YoY growth, leading the luxury segment in 2024.
How did the office market perform in 2024?
Transaction volumes in the office market reached 6.68 million sqm (71.9 million sqft) in 2024, a 19% increase over the previous high in 2019. Key drivers were Bengaluru, NCR, and Mumbai, which contributed 57% of the total transacted area.
What factors contributed to the growth in the residential real estate market post-pandemic?
Higher savings during the lockdown, stable incomes in middle and upper-income groups, household wealth creation, and the country's strong economic performance all contributed to the growth in the residential real estate market post-pandemic.
What was the impact of flex spaces on the office market in 2024?
Flex spaces saw a 52% YoY growth in 2024, with flex operators taking up 1.47 million sqm (15.8 million sqft). Co-working spaces, which dominated the segment, saw a 138% YoY surge in flex space absorption to 0.8 million sqm (8.6 million sqft) in H2 2024.
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