Residential Real Estate Market Soars, Ultra-Luxury and Flex Spaces See Shifts

Mumbai's home sales hit a 13-year high in 2024, while other major cities like Hyderabad and Pune also saw record sales. However, the ultra-luxury segment experienced a dip, and flex spaces witnessed a significant hike.

Real EstateResidential MarketLuxury SegmentFlex SpacesOffice MarketReal Estate NewsJan 08, 2025

Residential Real Estate Market Soars, Ultra-Luxury and Flex Spaces See Shifts

Real Estate News:Mumbai’s home sales hit a 13-year high in 2024, with 96,187 units sold, reflecting an impressive 11 percent increase.
Sales in the second half of 2024 rose by 6 percent year-on-year.
Most markets across major Indian cities remain at multi-year peaks, with Hyderabad and Pune achieving record highs in 2024.

In contrast, the Delhi-NCR market experienced a slight decline, with sales dropping by 4 percent both annually and semi-annually.
These findings are part of Knight Frank India’s India Real Estate report, which analyzed the residential and office space scenarios in eight major cities, including 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 strong economic performance have driven primary market sales to increase at an annualized rate of 23 percent since 2020.

Annual sales volumes hit a 12-year high, with 3.5 lakh units sold, marking a 7 percent year-on-year (YoY) growth.
In the second half of 2024, 1.8 lakh units were sold, representing a 3 percent YoY increase.

In the luxury segment, units priced above Rs 1 crore make up nearly half the residential market.
This segment accounted for 27 percent of sales with a 15 percent YoY growth.
The Rs 2 crore to Rs 5 crore segment is leading with a 62 percent YoY surge, growing its share from 10 percent in the second half of 2023 to 15 percent in H2 2024.
Sales in the Rs 50 lakh to Rs 1 crore and ultra-luxury segments above Rs 50 crores, however, saw a dip 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, which measures how quickly inventory clears, improved to 5.8 quarters, reflecting healthy market fundamentals.
Even in high-value segments like Rs 2 crore to Rs 5 crore, QTS levels stood at 3.9 and 4.2 quarters, respectively.

Bengaluru, NCR, and Mumbai emerged as the most transacted areas in the office market.
Transaction volumes in the office market in 2024 reached 6.68 million sqm (71.9 million sqft), exceeding the highest figures of 2019 by 19 percent.
Bengaluru, NCR, and Mumbai, which contributed 57 percent 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 percent of total transacted volumes in 2024, while Global Capability Centres (GCCs) took up 31 percent of transactions.

Flexible office spaces witnessed significant growth, with flex operators taking up 1.47 million sqm (15.8 million sqft), a record-high driven by small businesses taking up co-working spaces.
Co-working spaces dominated, constituting 68 percent of flex transactions, up from 58 percent in 2023.
H2 2024 saw a 138 percent 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 percent YoY, while vacancy rates dropped from 17.2 percent in H2 2021 to 15 percent in H2 2024.
NCR and Chennai recorded the lowest vacancies at 8.4 percent and 6.8 percent, respectively.

Limited supply and high demand pushed rents up by 3-7 percent YoY, with Hyderabad leading at 7 percent, followed by Bengaluru and Chennai at 6 percent each.

Frequently Asked Questions

Which city saw the highest increase in home sales in 2024?

Mumbai saw the highest increase in home sales in 2024, with 96,187 units sold, reflecting an impressive 11 percent increase.

Why did the ultra-luxury segment in real estate see a dip in sales?

The ultra-luxury segment saw a dip in sales due to a reduction in demand for properties priced above Rs 50 crores, while other segments saw growth.

What segments of the real estate market saw significant growth in 2024?

The Rs 2 crore to Rs 5 crore segment saw significant growth, with a 62 percent YoY surge, growing its share from 10 percent in H2 2023 to 15 percent in H2 2024.

Which cities are the key drivers of growth in the office market?

Bengaluru, NCR, and Mumbai are the key drivers of growth in the office market, contributing 57 percent of the total transacted area.

What is the significance of the quarters-to-sell (QTS) metric in the real estate market?

The quarters-to-sell (QTS) metric measures how quickly inventory clears, with a lower QTS level indicating greater sales traction and better market health.