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.
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.
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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.
New Delhi: India’s seven major cities witnessed an annual 8 per cent rise in the completion of housing units last year at 4.35 lakh units as developers’ cash flows improved on better sales, according to Anarock.
Real estate consultant showed that 4,35,045 units were completed during last year, as against 4.02 lakh units in the previous year. The data pertains to the primary (first sale) residential market. In Mumbai Metropolitan Region (MMR), 1,43,500 housing units were completed last year, up 13 per cent from 1,26,720 units in the previous year. The completion of housing units in Delhi-NCR rose 32 per cent to 1,14,280 units, as against 86,300 units in 2022.
“The Indian residential sector is unlikely to forget 2023, which was nothing less than phenomenal at every level. Housing sales breached the previous peak levels of 2022 and remain robust in 2024. These sales statistics – along with RERA-related commitments – have encouraged developers to stay focused on completing existing inventory,” Anarock Chairman Anuj Puri said.
With housing demand remaining high, he said developers are prioritising project completions. “Moreover, many large developers have also taken over the task of bringing many stuck or completely stalled projects by other players to completion,” Puri said, while listing out the reasons for higher execution levels.
Among other cities, the completion of homes in Pune declined 23 per cent to 65,000 units in 2023, from 84,200 units in 2022. Bengaluru, Hyderabad, and Chennai collectively saw 87,190 units completed in 2023, as against 81,580 units in 2022. In Kolkata, 25,075 units were completed in 2023, as against 23,190 units in 2022.
Proptech firm Reloy Founder and CEO Akhil Saraf said the housing market is gradually becoming more organised after the passage of realty law RERA. Real estate developers are focusing a lot on customer relationship management (CRM) and project executions, said Saraf, whose firm helps builders in generating referral sales.
Anarock also highlighted that the completion of units was the highest since 2017. As many as 2,04,200 units were completed in 2017, 2,46,140 units in 2018, 2,98,450 units in 2019, 2,14,370 units in 2020, 2,78,650 units in 2021. Record sales of residential properties in 2023 is one of the major factors for better execution of projects. As per the data, housing sales rose 31 per cent last year to nearly 4.77 lakh units across these seven cities, despite rise in prices by an average 15 per cent, and higher mortgage rates.