Residential Real Estate Thrives, Ultra-Luxury Dips, and Flex Spaces Surge - 2024 Market Analysis
The residential real estate market in India saw significant growth in 2024, with cities like Mumbai, Hyderabad, and Pune achieving record highs. However, the ultra-luxury segment and the Delhi-NCR market experienced slight declines. Flex spaces, particula
Residential Real EstateLuxury MarketFlex SpacesMumbai Real EstateOffice MarketReal Estate PuneJan 08, 2025
Sales in the second half of 2024 rose by 6% on a year-on-year basis.
Most markets remain at multi-year peaks across cities, with Hyderabad and Pune achieving record highs in 2024.
In contrast, the Delhi-NCR market experienced a slight decline, with sales dropping by 4% on both annual and semi-annual bases.
These insights are part of Knight Frank India’s India Real Estate report, which analyzed the residential and office space scenario across eight major cities Delhi-NCR, Mumbai, Ahmedabad, Kolkata, Bengaluru, Chennai, Hyderabad, and Pune.
The report highlights that the residential real estate market in India witnessed remarkable 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% year-on-year (YoY) growth throughout the year.
In the second half of 2024, 1.8 lakh units were sold, representing a 3% YoY increase.
In the luxury segment, units priced above Rs 1 crore make up nearly half of the residential market, accounting for 27% of sales with a 15% YoY growth.
The Rs 2 crore to Rs 5 crore segment is leading with a 62% YoY surge, growing its share from 10% in the second half (H2) of 2023 to 15% in H2 2024.
However, sales priced under Rs 50 lakh and the ultra-luxury segment above Rs 50 crores dipped in volume.
According to the report, developers launched 3.7 lakh units in 2024, an 11-year high, leading to increased unsold inventory.
While sales have seen healthy growth overall, unsold inventory has consistently increased since 2020 as supply levels have exceeded sales.
Despite this, the quarters-to-sell (QTS) metric, a measure of 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.
Generally, a lower QTS level denotes greater sales traction and better market health.
In the office market, transaction volumes 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 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.
Flexible office spaces witnessed a significant hike, with all end-use categories seeing YoY growth.
Flex spaces led at 52%, with flex operators taking up 1.47 million sqm (15.8 million sqft).
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, 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
Which cities saw the highest growth in residential real estate in 2024?
Mumbai, Hyderabad, and Pune achieved record highs in residential real estate sales in 2024.
What was the overall trend in luxury real estate in 2024?
The luxury segment saw significant growth, with units priced above Rs 1 crore accounting for 27% of sales and the Rs 2 crore to Rs 5 crore segment leading with a 62% YoY surge.
Why did flex spaces see a surge in demand in 2024?
The surge in demand for flex spaces, particularly co-working spaces, was driven by a higher incidence of small businesses taking up these spaces, leading to a 52% YoY growth.
What was the trend in office market transactions in 2024 compared to 2019?
Transaction volumes in the office market in 2024 reached 6.68 million sqm, exceeding the previously highest figures of 2019 by 19%.
Which cities recorded the lowest vacancy rates in the office market in H2 2024?
NCR and Chennai recorded the lowest vacancy rates at 8.4% and 6.8%, respectively.
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