Supply And Demand-side Factors Putting Upward Pressure On House Prices: Knight Frank

International Property Consultants - Knight Frank India, has announced its '2022 Outlook Report. According to the 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.

The report also highlights the fact that residential segment will witness around 5% capital value growth in 2022. Many of the supply and demand-side factors, assessed over the last decade, have started putting upward pressure on house prices, it has noted.

"Residential 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," the report states.

"The real estate sector recorded a smart recovery despite the pandemic exigencies in 2021 with segments like residential 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. Should we be able to continue at this pace, the real estate sector will see adequate recovery to match or indeed cross the pre- pandemic levels." Shishir Baijal, Chairman and Managing Director at Knight Frank India said.

With physical offices here to stay, portfolio optimization and hybrid working are expected to be the dominant themes going forward driven by incremental demand from IT/ITes firms and the rebond of flexible office operators. For the residential sector further demand revival is expected with strong end-user interest aided by government impetus and incentives by developers ensuring buoyancy. The warehousing segment that has been risk averse during the pandemic will maintain the growth run rate driven by demand from the ecommerce and 3PL players.