The rise in housing prices in India has been unabated at 7 per cent across top eight cities in India. It increased 7 per cent YoY amid an increased housing demand backed by continued positive home buyer sentiment and stable interest rates.
As per the CREDAI-Colliers- Liases Foras Housing Price-Tracker Report Q2 2023, Kolkata recorded the highest increase in residential prices at 15 per cent YoY, followed by Delhi NCR and Hyderabad with 14 per cent and 13 per cent YoY increase respectively.
The report stated that housing demand is poised for steady growth even amid unprecedented global economic headwinds owing to a continued desire for home ownership and stable interest rates, coupled with growth in disposable incomes.
“We are witnessing increased numbers due to the pent-up demand from Covid and despite the price rise, we expect this trend to continue for the rest of the fiscal year on the back of a relatively stabilised repo rate and lending eco-system. Additionally, the upcoming festive season will help in further boosting the sales and sustain the momentum through the start of 2024,” said Boman Irani, president of CREDAI National.
Top real estate markets have seen heightened activity in new launches in the past few quarters. As a result, unsold inventory expanded by 13 per cent YoY across the country. Delhi NCR witnessed a drop in unsold inventory levels at 7 per cent YoY, signaling a consistent revival in market fundamentals. With increased demand for spacious dwellings, developers continue to launch high-end projects, which has pushed housing prices for under-construction units northwards in markets such as Kolkata, Hyderabad, Delhi NCR and Bengaluru.
“Over the last 10 quarters, there has been a consistent upward trend in housing prices across the country. With repo rate stabilising since February 2023 at 6.5 per cent homebuyers' sentiments remain positive due to greater visibility on monthly EMIs. While developers continue to grapple with the challenges of higher costs of construction, housing demand remains unwavered. Housing demand is likely to further accelerate in the next few quarters led by the upcoming festive season and continued preference for home ownership,” pointed out Peush Jain, Managing Director, Occupier Services, Colliers India.
Factors such as improved infrastructure, enhanced connectivity, rising disposable income, and government incentives have fueled housing demand across Indian cities. While most cities saw double-digit price increases during Q2, Delhi NCR is consistently seeing an uptick in housing prices for the past 12 quarters. Notably, the newly-developed Dwarka Expressway and the upcoming 50 km six-lane highway in Delhi NCR are expected to further drive demand in Gurugram, Ghaziabad and Noida.
Amidst other major cities, prominent micro-markets in MMR saw a price rise of 3-5 per cent YoY. Highest housing price rise was in Kolkata at 15 per cent YoY, followed by Delhi NCR.
On the other hand, led by a spurt in new project launches, particularly in the northwest suburb in Ahmedabad and southwest micro market in Hyderabad, the two cities saw a surge in unsold inventory levels by 26 per cent and 24 per cent respectively. Despite increase in unsold inventory, housing prices in both the cities have consistently shown a rise over the past few quarters. Housing prices in Bengaluru also rose 10 per cent YoY, amid healthy demand momentum.