Knight Frank, in its latest report Asia-Pacific Residential Review Index for H2 2022 cited that Mumbai and Bengaluru have found place in the top 5 best performing Asia-Pacific residential markets in terms of annual price growth in H2 2022. According to the review index, 14 out of 23 Asia-Pacific (APAC) cities have recorded positive annual price growth with Metro Manila ranked as the best-performing Asia-Pacific market with 24% year-on-year (YoY) growth.
Mumbai and Bengaluru shared the 4th position on the Asia-Pacific Residential Review Index as both registered a price growth of 7% YoY in H2 2022. Delhi, another key residential market of India, found place in the top 10 best performing APAC markets with price growth of 6.8% YoY in H2 2022.
At a time when Reserve Bank of India has hiked policy rates by 25 bps in February 2023, prices in the residential markets of Bengaluru, Mumbai and Delhi are expected to grow moderately in the next 12 months. Bengaluru’s residential prices are expected to grow in the range of 3%-5%. Mumbai and Delhi’s residential prices are expected to grow in the range of 3%-4% and 2%-3% respectively.
Shishir Baijal, Chairman & Managing Director, Knight Frank India said, “Despite the Reserve Bank of India raising policy rates by a cumulative 225 bps in 2022, residential demand in the country has not only remained resilient but surged to a nine year high in terms of annual sales in 2022. H2 2022 is second only to H1 2022 in terms of being the half-yearly period with the highest sales in nine years.”
He further added, “Despite the further 25 bps hike by RBI in February 2023, India’s inherent economic strength and healthy affordability levels will be the prime factors that will support the residential market in the next 12 months.”
Although Asia-Pacific markets persist in having a cautious outlook due to increasing interest rates, high mortgage rates, and high inflation, most remain stable and optimistic due to the Chinese Mainland ending its Zero-covid strategy and the near full re-opening of the economy post-pandemic.
Victoria Garrett, Head of Residential at Knight Frank Asia-Pacific said, “Annualised home values in the APAC region’s residential sector rose noticeably slower in 2022, decelerating to 0.4% from 5.7% six months ago, as more homebuyers are priced out by the rise in mortgage rates and an inflationary environment sparks caution. Still, the slowdown belies the underlying resilience across the region. In markets that have corrected the most, such as Australia and New Zealand, home equity has stayed positive while the lagging property cycle in emerging Southeast Asian markets is now on a strong recovery footing. Across the region, residential markets continue to be well supported by robust economic fundamentals and are well positioned to weather the ongoing uncertainty.”