Fall in home sales and office leasing in Q2 not indicative of slowdown, say property consultants

June 29, 2024

Two sets of data that came out last week on the real estate sector showed some indications of a slowdown in demand, both in homes sales and office leasing though property analysts put it down to a temporary blip rather than a trend.

Higher homes prices could be hurting residential sales and companies may have temporarily put their leasing plans in pause mode due to the general elections, they said.

Property consultant Anarock issued a report that showed home sales declining sequentially in the second quarter of 2024 and rising by a modest amount on year.

According to its data residential sales at in the June quarter at 1.2 lakh units was 8 per cent down on the quarter compared to 1.3 lakh units in the March quarter.

The second report by Colliers on office leasing in the top six cities showed that though it showed an overall growth in the second quarter as well as the first half of 2024, the figure was skewed by the high leasing numbers in Mumbai, Hyderabad and Bengaluru, which together accounted for nearly 70 per cent of the total leasing across all the cities.

“For both the residential and commercial sectors, Q1 2024 saw all-time best performance, and this created a high base,” said Prashant Thakur, Regional Director & Head – Research, Anarock.

“We therefore cannot say that the drop in leasing and housing sales is any sign of a slowdown, but more of a high base effect. Moreover, as far as office real estate is concerned, the elections could have had an impact as many corporates hold on to their expansion plans in anticipation of the new government.”


Anarock Chairman Anuj Puri attributed the quarterly decline in home sales to the high base effect in the first quarter and higher home prices. “…this drop is also due to the significant hike in property prices over the last one year, which in turn has prompted many investors to take a breather,” he said.

The data provided by Anarock on the sales in the June quarter showed that with the exception of the National Capital Region, all other major cities showed a decline in sales sequentially ranging from 3 to 23 per cent, with Hyderabad having the most fall.

Property prices were 4-10 per cent higher in the June quarter from the March quarter.

Thakur pointed out that high prices can prompt investors to take a pause and added, “However, demand remains high and if prices are kept in check henceforth, housing sales may not be majorly impacted in the upcoming quarters.”

He said Anarock has projected an 8-10 per cent yearly growth in homes sales in 2024. 


“Although the demand and supply of office space in few cities have seen an annual dip in Q2 2024, there is no suggestive trend of a slowdown in the office market of the country,” said Vimal Nadar, Senior Director & Head of Research, Colliers India.

While leasing across the top six cities saw an uptick of 8 per cent in Q2 buoyed by Mumbai, Hyderabad and Bengaluru, the other three cities Chennai, Delhi-NCR and Pune saw a decline in the 39-41 per cent range. In the first half too leasing in these three cities fell 17-31 per cent.

Nadar said office market activity was usually stronger in the second half of the year and “demand base diversification will continue and play a critical role in leasing activity breaching 50 msf for the third consecutive time in 2024.”

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