Housing prices across the top eight cities in India increased 7 per cent YoY amid robust housing demand backed by continued positive homebuyer sentiment and stable interest rates, according to a joint report by CREDAI, Colliers and Liases Foras.
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, according to the report titled ‘Housing Price-Tracker Report Q2 2023′.
“Fuelled by a continued desire for home ownership and stable interest rates, coupled with growth in disposable incomes, housing demand is poised for steady growth even amid unprecedented global economic headwinds,” it said.
Boman Irani, president of CREDAI-National, said, “The ongoing momentum in quantum of sales across the country is a clear reflection of positive homebuyer sentiments and validates the conducive nature of the market. We are also witnessing record-breaking numbers due to the pent-up demand from COVID-19 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 ecosystem.”
He added that the upcoming festive season will also help further boost sales and sustain the momentum through the start of 2024.
According to the report, in tandem with sales, top markets have also seen heightened activity in new launches in the past few quarters. As a result, unsold inventory expanded by 13 per cent YoY across India. Delhi-NCR witnessed a drop in unsold inventory levels at 7 per cent YoY, signaling a consistent revival in market fundamentals.
With an increased demand for spacious dwellings, developers continue to launch high-end projects, which has pushed housing prices for under-construction units northwards in markets like Kolkata, Hyderabad, Delhi-NCR, and Bengaluru.
Peush Jain, managing director (occupier services) of Colliers India, said, “Over the past 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.”
He added that 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.
Vimal Nadar, senior director and head (research) at Colliers India, said, “Factors like 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 2023, Delhi NCR is consistently seeing an uptick in housing prices for the past 12 quarters.”
He added that 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. Amid other major cities, prominent micro-markets in MMR saw a price rise of 3-5 per cent YoY.
In Q2 2023, overall housing prices in Kolkata witnessed a 15 per cent YoY rise, the highest across the top-eight cities in India. Housing prices in the city have been on the rise over the past seven quarters. The recent surge in housing prices is owing to the rising demand boosted by positive government incentives such as the extension of a 2 per cent reduction in stamp duty and an extension of 10 per cent reduced circle rates till September 2023.
Delhi-NCR witnessed a 14 per cent YoY rise in housing prices during Q2 2023. At the micro-market level, Golf Course Road and Dwarka Expressway witnessed the highest rise in housing prices at 46 per cent and 40 per cent, respectively, on a YoY basis.
Housing prices in Golf Course Road continue to surpass the prices of Delhi in Q2 2023 attributed to its improving connectivity and proximity to commercial office hubs in Gurugram, which have sparked a surge in demand for residential properties.
Pankaj Kapoor, managing director of Liases Foras, said, “The housing market has maintained its prudence and discipline primarily due to a high number of new launches over the last year, and momentum is continuous. Increasing supply has kept the price rise moderate and productive, drawing both the end user and long-term investors. Sales will likely continue to grow since the affordability and prices maintain parity.”
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