The real estate market is witnessing a steady and significant rise in residential housing prices across top cities of India. This surge is driven by a combination of factors, including rising demand and the subsequent uptick in the new supply. The industry leaders expect the realty sector to sustain this momentum ahead of the festive season.

“Indian Real Estate has been somewhat experiencing a bull run in the past few quarters, substantiated by the volume of transactions across top 8 cities as well as the prevalent positive sentiments towards housing,” says Boman Irani, President of CREDAI National.

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Uptick In Housing Prices

The recent ‘Housing Price-Tracker Report Q2 2024’ by CREDAI, Colliers, and Liases Foras highlights a steady 3 per cent quarter-on-quarter (QoQ) increase in housing prices, with a 12 per cent year-on-year (YoY) rise.

The report shows that Delhi NCR and Bengaluru witnessed the highest QoQ price increases, at 16 per cent and 8 per cent respectively, reflecting robust demand and positive homebuyer sentiment.

This surge had a direct bearing on unsold inventory which remained stable on a pan-India level but dropped marginally on a quarterly basis amid healthy sales in housing units.

Delhi NCR (National Capital Region) recorded the highest YoY growth at 30 per cent, driven by significant price appreciation in areas like Dwarka Expressway and Greater Noida. According to the report, homebuyers’ preference for spacious housing units in luxury and ultra-luxury segments led to 12 per cent QoQ growth in the average price of 3 to 4 BHK units in Delhi NCR.

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Bengaluru followed closely, with luxury segments pushing average prices beyond Rs 11,000 per square foot. Despite new launches, unsold inventory declined in most cities, with Pune seeing the highest drop at 13 per cent.

“Stable interest rates and recent positive budgetary announcements, have provided tailwinds for the housing market of the country,” adds Badal Yagnik, chief executive officer, Colliers, India.

Trends Across Top 5 Cities

A five-year analysis by ANAROCK Research shows massive price appreciation in micro-markets, with Bengaluru’s Bagaluru leading at 90 per cent and Hyderabad’s Kokapet at 89 per cent. Says Anuj Puri, Chairman, ANAROCK Group, “With new supply of approx. 17,065 units in the period, the average residential prices at Bagaluru jumped up from INR 4,300 per sq. ft. in 2019 to approx. Rs 8,151 per sq. ft. in H1 2024.”

Additionally, Bengaluru’s Whitefield and Sarjapur Road areas clocked 3rd and 5th spots with an 80 per cent and 50 per cent price appreciation respectively.

NCR’s Dwarka Expressway ranks 4th with a 79 per cent price surge wherein average prices increased from Rs 5,359 per sq. ft. in 2019 to over Rs 9,600 per sq. ft. in H1 2024.

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Moreover, according to the ANAROCK data, the top 7 cities collectively saw over 44 per cent of price appreciation in the last five years. At a city level, Hyderabad recorded the highest jump of 64 per cent between 2019 and H1 2024, followed by Bengaluru with a 57 per cent increase. The lowest price growth of 25 per cent was seen in Kolkata. NCR and Mumbai Metropolitan Region (MMR) both saw a 48 per cent price appreciation each in this period.

This growth is indicative of the strength of the residential market, which is expected to sustain momentum into 2024, driven by strong demand, stable interest rates, and the upcoming festive sales. However as prices continue to surge, affordability remains a key concern for home buyers.