Amidst a positive economic outlook, housing demand has scaled up and property prices across the top eight cities in India have surged by around 20% in the last two years, a report by Credai, Colliers and Liases Foras has said.
The eight cities included Ahmedabad, Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), and Pune.
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Bengaluru, Delhi NCR, and Kolkata have witnessed the highest rise in average housing prices at about 30% in 2023 compared to 2021 levels. This robust growth is underpinned by a notable uptick in housing demand, particularly in the mid and luxury housing segments.
Bengaluru witnessed a 21% increase in the YoY period in 2023, Delhi-NCR witnessed a 9% increase in the same period and MMR 4%, the report showed.
Also Read: Bengaluru ranks 8th and Mumbai 9th in annual housing price growth index across Asia Pacific region
Overall, the unsold inventory saw a notable drop in 2021 and largely continued to remain range bound until 2023 end, despite a significant influx of new supply. During 2022 and 2023 housing markets across the major cities saw an increase in new property launches, in the mid and luxury segments.
In cities like Bengaluru, Hyderabad, Kolkata, MMR, and Pune new supply has increased 2-2.5 times in the last two years, reflecting robust activity and improved developer-market sentiment.
“The year-on-year increase in housing prices is a combination of a number of factors – characterized by strong, robust demand from homebuyers – especially for mid and premium segments, along with the existence of a conducive buying eco-system coupled with healthy macro-economic factors, and the rise in prices of construction materials. We expect both – housing demand and supply – to thrust forward in 2024 not only in top 8 cities but in Tier II, III regions as well,” said Boman Irani, president, CREDAI National.
“Housing prices continued to reflect strong market momentum and saw a 9% annual rise in 2023. The year out performed in several areas, including high-end and luxury segments, scaling a new peak in sales volume, infrastructure led development, resulting in deeper price discovery across most of the markets. During the year, all the eight major cities witnessed an increase in housing prices, with Bengaluru, highest at 21% YoY, followed by Kolkata at 11%,” Badal Yagnik, Chief Executive Officer, Colliers, India.
“The current state of real estate is the most productive when sales, supply, and prices are growing, and the price rise is not speculative. These factors work in harmony in a balanced and healthy real estate market,” said Pankaj Kapoor, Managing Director, Liases Foras.
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