Average housing prices up 3-10% in July-September; office rent rises up to 13%

Average housing price across eight cities rose 3-10% year-on-year in July-September this year, while office rent grew up to 13% on higher demand for properties, according to Knight Frank India.

Bengaluru property market saw the highest growth in average housing price as well as average office rent during the third quarter of the 2022 calendar year as compared with the corresponding period of the previous year, property consultant Knight Frank India said in its report ‘India Real Estate – Office and Residential Market July-September 2022’.

As per the data of primary housing market, the average price in Bengaluru rose 10% to ₹5,428 per square feet in July-September quarter from ₹4,928 per square feet in the year-ago period.

The Delhi-NCR market saw 8% increase in average housing price to ₹4,489 per square feet.

Mumbai, Pune, Chennai and Hyderabad witnessed an increase of 6% in average price of residential properties to ₹7,170 per square feet, ₹4,250 per square feet, ₹4,300 per square feet and ₹4,977 per square feet, respectively.

Housing price in Kolkata rose 4% to ₹3,350 per square feet, while the average rate in Ahmedabad grew 3% to ₹2,885 per square feet.

With the revival in demand after the second wave of the COVID pandemic, real estate developers, especially large listed entities, have been raising housing prices every quarter to offset increase in rates of key construction materials.

According to Knight Frank report, housing sales rose 15% in the third quarter of 2022 to 73,691 housing units across top eight cities from 64,010 in the same quarter of 2021. During January-September, sales have risen 40% to 2,32,396 units from 1,63,426 units in the corresponding period of the previous year.

On office rentals, the Knight Frank data showed that average rent in Bengaluru rose 13% to ₹81 per square feet a month during July-September this year compared with ₹72 per square feet in the preceding year.

Average monthly rent in Pune rose 9% to ₹71 per square feet.

“Bengaluru and Pune office markets recorded maximum increase in their rental value at 13% and 9% YoY [Year-on-Year], respectively mostly due to higher demand and lack of Grade A space,” the consultant said.

In Hyderabad, average monthly rent grew 7% to ₹65 per square feet, while in Chennai, the rent went up 5% to ₹61 per square feet.

Mumbai also saw a 4% rise in rent to ₹110 per square feet.

Office rentals in Ahmedabad, Delhi-NCR and Kolkata remained stable at ₹40.1 per square feet, ₹81.9 per square feet and ₹34.7 per square feet, respectively.

Rentals have increased on better demand of office space this year with the opening up of the economy and gradual return of employees to workplace.

Knight Frank data suggests that office space leasing increased 29% year-on-year during the July-September period to 16.1 million square feet across eight cities on better demand from corporates and coworking players.