Housing prices across the top eight cities in India have increased by 8 per cent year-on-year in Q2 “amid robust housing demand backed by continued positive homebuyer sentiment and stable interest rates,” according to a report released by CREDAI and Colliers Liases Foras.
Housing prices in Kolkata have increased by 15 per cent year-on-year (YoY) in the April-June quarter of 2023. It was the highest increase in residential prices among the eight cities, according to the report. “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 extension of 2 per cent reduction in stamp duty and extension of 10 per cent reduced circle rates till September 2023,” the report said.
Delhi-NCR came second as housing prices in the northern region have risen by 14 per cent YoY in Q2. Hyderabad witnessed a rise of 13 per cent in housing prices in the last year during the second quarter, said the report.
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 during Q2 2023. “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,” the report added.
Pan India residential prices Q2 2023 (in Rs /sq ft) –
|Average Price Q2 2023
Source: Liases Foras, Colliers (All the prices are based on carpet area)
Vimal Nadar, Senior Director and Head of Research at Colliers India, said some areas were seeing more interest. “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. Notably, the newly developed Dwarka Expressway and the upcoming 50-km, 6-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 year-on-year.”
Housing prices in Bengaluru surged 10 per cent YoY during Q2 2023, with prices in the periphery and outer west micro markets witnessing the highest rise of 42 per cent led by upcoming high-end projects. Housing prices of 3 BHK units surged the highest at 12 per cent YoY followed by 2 BHK units owing to the rising demand for mid-segment residential properties.
A pause in repo rate change by the Reserve Bank of India (RBI) during February has boosted homebuyers’ sentiment, said Peush Jain, Managing Director-Occupier Services, Colliers India. “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 unwavering. Housing demand is likely to further accelerate in the next few quarters led by the upcoming festive season and continued preference for home ownership,” he said.
Unsold inventory in Delhi NCR drops 7% Y-o-Y
The unsold inventory in Delhi NCR declined 7 per cent YoY, making it the only city to witness such a drop, according to the report. “Unsold inventory in Delhi NCR has been witnessing a drop for the last two quarters, signaling positive consumer buying sentiment,” the report added.
Unsold inventory levels rose in some places due to a spurt in project launches.
The northwest suburb of Ahmedabad and the southwest micro market of Hyderabad saw a surge of 26 per cent and 24 per cent, respectively, on YoY basis during Q2. “Despite the increase in unsold inventory, housing prices in both the cities have consistently shown a rise over the past few quarters,” it said.
Pankaj Kapoor, Managing Director, 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. “The 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,” said Kapoor.