Residential Real Estate Market Booms, Ultra-Luxury Segment Faces Challenges, Flex Spaces Thrive
Mumbai's home sales hit a 13-year high in 2024, showcasing a robust real estate market across major Indian cities. However, the ultra-luxury segment saw a dip, and flex spaces experienced a significant surge.
Residential Real EstateLuxury SegmentFlex SpacesOffice MarketTransaction VolumesReal EstateJan 08, 2025
Sales in the second half of 2024 also saw a 6% year-on-year (YoY) growth.
This trend was not isolated to Mumbai; other cities like Hyderabad and Pune also achieved record highs in 2024, reflecting a strong residential real estate market.
In contrast, the Delhi-NCR region experienced a slight decline, with sales dropping by 4% both annually and semi-annually.
These findings are part of Knight Frank India’s comprehensive India Real Estate report, which analyzed the residential and office space scenarios in eight major cities Delhi-NCR, Mumbai, Ahmedabad, Kolkata, Bengaluru, Chennai, Hyderabad, and Pune.
The report highlights that the residential real estate market in India has witnessed significant growth since the pandemic.
Driven by higher savings during the lockdown, stable incomes in middle and upper-income groups, household wealth creation, and the country's strong economic performance, primary market sales increased at an annualized rate of 23% since 2020.
Annual sales volumes hit a 12-year high, with 3.5 lakh units sold, marking a 7% YoY growth throughout the year.
The second half of 2024 saw 1.8 lakh units sold, representing a 3% YoY increase.
The luxury segment, particularly units priced above Rs 1 crore, accounted for 27% of sales, showing a 15% YoY growth.
Notably, the Rs 2 crore to Rs 5 crore segment saw a 62% YoY surge, growing its share from 10% in the second half of 2023 to 15% in H2 2024.
However, sales in the lower price segments, including those under Rs 50 lakh and between Rs 50 lakh to Rs 1 crore, as well as the ultra-luxury segment above Rs 50 crores, saw a decline in volume.
Developers launched 3.7 lakh units in 2024, an 11-year high, leading to increased unsold inventory.
Despite this, the quarters-to-sell (QTS) metric, a measure of how quickly inventory clears, improved to 5.8 quarters, reflecting healthy market fundamentals.
In the high-value segments like Rs 2 crore to Rs 5 crore, QTS levels stood at 3.9 and 4.2 quarters, respectively.
Transaction volumes in the office market in 2024 reached 6.68 million sqm (71.9 million sqft), exceeding the previously highest figures of 2019 by 19%.
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 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 flex space market witnessed a significant hike in 2024, with all end-use categories showing YoY growth.
Flex spaces led with a 52% increase, driven by the higher incidence of small businesses taking up co-working spaces.
Flex operators took up 1.47 million sqm (15.8 million sqft), a record-high, with co-working spaces 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, while vacancy rates dropped from 17.2% in H2 2021 to 15% in H2 2024.
NCR and Chennai recorded 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 cities saw the highest residential real estate sales in 2024?
Mumbai, Hyderabad, and Pune achieved record highs in residential real estate sales in 2024.
How did the ultra-luxury segment perform in 2024?
The ultra-luxury segment, particularly units priced above Rs 50 crores, saw a decline in volume in 2024.
What is the significance of the quarters-to-sell (QTS) metric?
The QTS metric measures how quickly inventory clears. A lower QTS level denotes greater sales traction and better market health. In 2024, the QTS metric improved to 5.8 quarters, reflecting healthy market fundamentals.
Which cities were the key drivers of growth in the office market in 2024?
Bengaluru, NCR, and Mumbai were the key drivers of growth in the office market in 2024, contributing 57% of the total transacted area.
What trend was observed in the flex space market in 2024?
The flex space market saw a significant hike in 2024, with all end-use categories showing YoY growth. Flex spaces led with a 52% increase, driven by the higher incidence of small businesses taking up co-working spaces.
Related News Articles
Maharashtra Set to Revolutionize Electronics with First OSAT Facility in Navi Mumbai
Maharashtra takes a giant leap in electronics manufacturing with the inauguration of its first OSAT facility in Navi Mumbai, set to become operational by September.
Maharashtra Apartment Act: Proposed Amendments Set to be Submitted Soon
The Maharashtra government is set to submit proposed amendments to the Maharashtra Ownership Flats (Regulation of the Promoters and Flat Purchase and Construction) Act, 1960. These amendments aim to address various issues faced by flat buyers and promoter
Kunkolim Villagers Intensify Protests Against Real Estate Conversion of 1 Lakh Sqm Orchard Land
Residents of Kunkolim are ramping up their efforts to prevent real estate developers from converting a massive 1 lakh square meter of orchard land. The villagers have submitted a memorandum to the South Goa Collector, who recently inspected the site. They
Miami Developer Calls for Urgent Interest Rate Cuts to Stabilize Real Estate Market
Prominent Miami real estate developer Jorge Perez emphasizes the critical need for interest rate cuts to mitigate escalating construction costs and stabilize the market.
Home Loan Borrowers' Hopes for the Union Budget 2025
As the Union Budget 2025 approaches and with the current government's focus on the real estate sector, there are high hopes among home loan borrowers for significant benefits and reforms. This article explores what home buyers and existing borrowers are l
Mumbai Real Estate: Financial Consulting Firm Directors Acquire ₹106 Crore Juhu Apartment
In a significant real estate move, the directors of a prominent financial consulting firm have purchased a luxurious ₹106 crore apartment in Juhu, Mumbai. This acquisition highlights the growing interest in high-end residential properties in the city.