India’s real estate market has witnessed a significant surge in home prices, with Delhi-NCR leading the pack with a staggering 16% year-on-year increase, as per the recent survey prepared by CREDAI, Colliers and Liases Foras. According to the report, the top eight cities in India, including Delhi-NCR, Pune, Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, and the Mumbai Metropolitan Region, experienced an overall 8% rise in housing prices during the first quarter of 2023.
“The robust development of infrastructure, particularly in Noida and Gurugram, has played a significant role in real estate growth in the National Capital Region (NCR). The present surge in home sales is highly encouraging, coming as it is after the last few years sluggish performances. This upturn can be attributed to consumers’ aspirations for an enhanced lifestyle, the availability of superior projects in the market, and the presence of reliable developers. Such favourable market sentiment has motivated developers to introduce new projects that meet the increasing aspirations of contemporary homebuyers,” says Manoj Gaur, Chairman & Managing Director of Gaurs Group.
Delhi-NCR emerged as the city with the highest surge in residential prices, witnessing a remarkable 16% year-on-year increase. Kolkata and Bengaluru followed closely with 15% and 14% respectively. All prices are based on the carpet area, offering a more accurate representation of the actual living space.
“Despite the prevailing higher interest rates, housing prices have shown no signs of abating. The consistent demand observed since the previous year has been a key factor in increasing prices. The report emphasizes that with interest rates expected to have reached their peak and a pause in the rising repo rate, coupled with a healthy domestic economic outlook, market sentiment is anticipated to remain positive,” says Salil Kumar,Director- Marketing and Business Management,CRC group.
Developers are keen to capitalize on the growing demand, leading to an upsurge in new project launches across the top eight cities. Consequently, the overall unsold inventory has witnessed a 12% year-on-year increase. It is noteworthy that approximately 95% of the unsold units in these cities are still under construction, indicating the scale of ongoing development activity.
“Housing prices have been steadily climbing since last year, pricing is increasing due to an increase in construction costs also. This upward trend is expected to persist due to consumers’ strong inclination towards purchasing new, larger homes with improved amenities. The pandemic has significantly reshaped people’s preferences, emphasizing the desire to own a home rather than rent. Furthermore, the recent moderation in the last two rate hikes by the RBI has instilled hope that we may have reached the peak in terms of interest rates,”says Sanjay Sharma,Director,SKA group.
“Despite the rise in prices, labour costs and people’s preference for larger homes post-pandemic, Delhi-NCR has observed a decline in unsold inventory. This data is highly encouraging. It is a precursor to things to come. Looking ahead, we can foresee a substantial increase in housing sales. It presents lucrative opportunities for developers to plan new projects in the emerging realty hotspots and help buyers realise their housing dreams,”says Amit Modi,Director,County group.
When it comes to the distribution of unsold inventory, the Mumbai Metropolitan Region (MMR) accounted for the largest share at 37%, followed by Pune at 13%. This suggests that while the demand for housing remains strong, some regions may face challenges in managing their existing inventory.