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NCR Records 3% YoY Growth in Residential Sales in H1 2023

According to data released by Knight Frank India, the National Capital Region's primary residential market registered sales of 30,114 units during the first half of 2023, reflecting a 3% increase compared to the same period in the previous year. This figure represents the strongest sales performance recorded for the region since H1 2013, and also led to a notable improvement in market health the Quarters to Sell (QTS) metric dropped from 9.6 in H2 2022 to 7.2 in H1 2023. Gurgaon emerged as the dominant market, commanding a 52% share of total residential sales in the region. Residential Market Summary: Top Eight Indian Cities City H1 2023 Sales H1 2022 Sales YoY Change % of Overall Sales H1 2023 Launches H1 2022 Launches YoY Change % of Overall Launches Mumbai 40,798 44,200 -8% 26.04% 50,546 47,466 6% 29.15% NCR 30,114 29,101 +3% 19.22% 29,738 28,726 4% 17.15% Bengaluru 26,247 26,677 -2% 16.75% 23,542 21,223 11% 13.57% Pune 21,670 21,797 -1% 13.83% 21,234 17,393 22% 12.24% Hyderabad 15,355 14,693 +5% 9.80% 22,851 21,356 7% 13.18% Ahmedabad 7,982 8,197 -3% 5.09% 10,556 10,385 2% 6.08% Kolkata 7,324 7,090 +3% 4.67% 6,776 6,686 1% 3.90% Chennai 7,150 6,951 +3% 4.56% 8,122 7,570 7% 4.68% All India 1,56,640 1,58,705 -1.30% 1,73,365 1,60,806 +7.81% Source: Knight Frank India The report noted that 2023 commenced on an encouraging note for the NCR residential market, with sales reaching a decade-high while new project launches showed some moderation compared to H2 2022. However, on a year-on-year basis, launch volumes in H1 2023 still surpassed those of H1 2022 by 4%. The report further added that while developers continued introducing new projects, many also stepped up efforts to acquire fresh land parcels in preparation for future project pipelines. This positive momentum also supported residential pricing, with average prices climbing 5% over the preceding 12 months, reflecting steady appreciation. Residential Market Health: Unsold Inventory & QTS City Unsold Inventory (YoY Change) QTS Mumbai 1,69,577 (+7%) 8.4 NCR 1,00,583 (+5%) 7.2 Ahmedabad 24,926 (+35%) 7.3 Hyderabad 38,896 (+54%) 5.3 Kolkata 20,138 (-3%) 5.5 Bengaluru 56,693 (-8%) 4.4 Chennai 15,156 (+11%) 4.4 Pune 45,604 (-2%) 4.3 All India 4,71,573 (+7%) 6.7 Source: Knight Frank Research Residential Price Movement City H1 2023 Price (₹/sq ft) 12-Month Change 6-Month Change Mumbai ₹7,593 +6% +3% Bengaluru ₹5,643 +5% +2% Hyderabad ₹5,410 +10% +9% NCR ₹4,638 +5% +3% Pune ₹4,385 +3% +2% Chennai ₹4,350 +3% +1% Kolkata ₹3,428 +2% +2% Ahmedabad ₹3,007 +4% +4% Source: Knight Frank India In terms of ticket-size distribution, the share of units priced above Rs 10 million in NCR's total sales volume has grown consistently since H2 2021. Starting at 37% in H2 2021, this category expanded to 41% in H1 2022, climbed further to 50% in H2 2022, and surged to 65% of total regional sales in H1 2023 indicating a clear shift in buyer preference towards premium and luxury housing. Gurgaon Residential Market Trends Gurgaon's share within NCR's total residential sales volume has grown with each successive half-year since H2 2019. The city held a modest 12% share in H2 2019, but by H1 2023 that figure had risen dramatically to 52%. Strong buyer demand has simultaneously energised new project launches in the city. In H1 2023, Gurgaon accounted for 82% of all new launches across the NCR up from just 19% in H1 2021 as developers intensified activity in the city's expanding peripheral sectors. New residential projects were introduced during this period across Sectors 53, 63, 76, 77, 79, Badshahpur, 37D, 93, 103, and 111. Noida & Greater Noida Residential Market Trends In contrast to Gurgaon's rising trajectory, Noida and Greater Noida have seen their combined share in NCR's residential sales decline steadily since H2 2019. After holding a 71% share in H2 2019, the figure had already contracted to 42% by H1 2022, and slipped further to 32% in H1 2023. The key reasons identified for this decline include the scarcity of ready-to-move-in inventory in Noida's prime micro-markets closer to Delhi, along with a shortage of new launches by credible and established developers in both cities. New launch activity also remained muted, with Noida and Greater Noida together contributing only 13% of NCR's total H1 2023 launches down from 26% in H1 2022. New residential projects were introduced in Techzone IV, Sector 12, and Sector 16B in Greater Noida, while Noida saw limited activity in Sectors 94 and 150. Mudassir Zaidi, Executive Director North, Knight Frank India, remarked that despite headwinds from elevated home loan interest rates, the NCR market recorded the second-highest residential sales growth among major cities during H1 2023, underscoring the resilience of end-user demand in the region. Office Market Trends in H1 2023 In the commercial office segment, NCR emerged as the second-best performing market among the top eight Indian cities in terms of leased office space during H1 2023. Total office transactions in the region grew from 4.1 million square feet in H1 2022 to 5.1 million square feet in H1 2023, a year-on-year increase of 24%. New office completions during the same period were recorded at 3.9 million square feet, marking a 58% YoY increase. Of the total office space transacted, Gurgaon commanded a 57% share, followed by Noida at 33% and Delhi at 10%. Within Delhi's contribution, the Secondary Business District (SBD) accounted for 9% of the city's total. Office Market Summary: Top Eight Indian Cities City H1 2023 Transactions (mn sq ft) H1 2022 Transactions (mn sq ft) YoY Change H1 2023 New Completions (mn sq ft) H1 2022 New Completions (mn sq ft) YoY Change Bengaluru 7.0 7.7 -10% 6.4 5.8 +10% NCR 5.1 4.1 +24% 4.0 2.5 +58% Chennai 4.5 2.2 +107% 2.3 3.0 -26% Mumbai 3.2 3.0 +9% 1.4 1.0 +37% Hyderabad 2.9 3.2 -8% 1.3 5.3 -76% Pune 2.3 3.3 -30% 2.6 5.0 -49% Kolkata 0.6 0.6 -3% 0.2 -100% Ahmedabad 0.5 1.3 -59% 0.3 1.3 -81% All India 26.1 25.3 +3% 18.0 24.1 -25% Source: Knight Frank India In terms of the end-use composition of leased office space, India-facing operations contributed the largest share at 49%, while flexible workspace operators accounted for 25%. Global Capability Centres (GCCs) represented 22% of the total, with third-party IT services making up the remaining 4%. The report noted that the pandemic period had significantly accelerated the expansion of GCCs, particularly across the BFSI, consulting, and IT sectors in key NCR locations. Business District-Wise Office Rental Movement Business District Rental Range in H1 2023 (₹/sq ft/month) 12-Month Change 6-Month Change CBD Delhi ₹218 ₹350 0% 0% SBD Delhi ₹85 ₹200 0% 0% Gurugram Zone A ₹110 ₹162 +1% 0% Gurugram Zone B ₹85 ₹135 0% 0% Gurugram Zone C ₹25 ₹35 0% 0% Noida ₹50 ₹85 +4% 0% Faridabad ₹45 ₹55 0% 0% Source: Knight Frank Research Gurgaon Office Market Trends Gurgaon recorded 2.9 million square feet of office space transactions in H1 2023, accounting for 57% of NCR's total leasing activity. Of the 160 deals concluded across the region during this period, Gurgaon's share stood at 58% the highest among all sub-markets. While Gurgaon's proportional share in NCR's overall leasing activity declined slightly from 71% in H1 2022 to 57% in H1 2023, the absolute volume of transactions remained comparable to the year-ago period. Gurugram Zone A continued to attract the strongest occupier interest, accounting for 35% of NCR's total leasing. Golf Course Extension Road and MG Road remained the most active pockets within this zone, benefitting from the availability of Grade A office spaces at relatively competitive rental rates. Noida Office Market Trends Noida absorbed 1.6 million square feet of office space in H1 2023, representing a 33% share of NCR's total leasing a meaningful improvement from its 25% share in H1 2022. This translates to a 60% year-on-year growth in absolute leasing volume for Noida during this period. Sectors 16B, 62, 129, and 135 were among the most active locations attracting occupier interest. Noida also led in terms of new office supply, contributing 64% of NCR's total new completions in H1 2023. Sectors 129, 132, 143A, and 144 received fresh infusions of Grade A office stock. The rising occupier demand resulted in average office rents in Noida recording a 4% year-on-year increase during H1 2023. Mudassir Zaidi, Executive Director North, Knight Frank India, further commented that despite office leasing volumes reaching a new high in the region, rental levels remained broadly stable in the face of global economic uncertainty and inflationary cost pressures facing occupiers. Among all occupier categories, India-facing businesses contributed the largest portion of transactions at 49% of total volumes during H1 2023.