Housing prices may jump 5% in 2022: Knight Frank India report

Housing prices are likely to rise 5 per cent next year due to improved demand, explained Knight Frank India in its '2022 Outlook Report'.

"While 2021 was mostly impacted by the volatility due to the pandemic, 2022 may prove to be a more stable year for the sector both for commercial as well as the residential sector," added the report.

On the housing segment, the report mentioned that sales momentum is expected to continue in 2022 as prospective homebuyers' preferences for bigger homes, better amenities, and attractive pricing will keep them interested to seal the deals.

It also added that after facing a series of structural reforms like demonetisation, GST, and RERA during the last decade, the pandemic arrived as another blow for the real estate sector.

The property consultant wrote that its decadal analysis of the 2011-21 period has inducted that several supply and demand-side factors have started putting upward pressure on housing prices. "We expect around 5 per cent capital value growth for residential property segment in the country in 2022," read the report.

"With enhanced penetration of institutional players on development as well as financial side, price rise is expected to be gradual and times by well-deliberated project performance milestones," it added.

Knight Frank's Homebuyers survey 2021 has indicated that 61 per cent of respondents are expecting a price rise in the next 12 months. In contrast, 66 per cent of respondents in its latest Supply-side Sentiment survey, which covers developers and financial institutions, are expecting a price hike in the next six months.

Shishir Baijal, Chairman and Managing Director at Knight Frank India has noted that the real estate sector had recorded a smart recovery despite the impact of the COVID-19 pandemic in 2021. He added that segments like residential have been outperforming others.

"The disruption caused by the pandemic is slowing settling and the real estate market is expected to gain back its rhythm in the next two to three quarters, albeit, the threats of the new variant is adequately contained with minimum disruption in the early part of the new year.," said Baijal.

"Should we be able to continue at this pace, the real estate sector will see an adequate recovery to match or indeed cross the pre-pandemic levels," he added.

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