Average housing prices in Pan India rose 7% YoY at Rs 9,625 per sq ft during Q2 2023, led by robust housing demand which in turn was led by continued positive homebuyer sentiment amidst stable interest rates, according to CREDAI-Colliers-Liases Foras’ Housing Price-Tracker Report Q2 2023.

All the eight cities except MMR saw an increase in housing prices with Kolkata witnessing the steepest rise at 15% YoY, closely followed by Delhi NCR at 14% and Hyderabad with 13%.

Fueled 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.

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Commenting on the same, 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’re also witnessing record breaking 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 stabilized 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.”

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% YoY Pan India. Noteworthily, Delhi NCR witnessed a drop in unsold inventory levels at 7% 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 like 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 stabilizing since February 2023 at 6.5%, 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,” said Peush Jain, Managing Director, Occupier Services, Colliers India.

“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. 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% YoY,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

Highest housing price rise in Kolkata at 15% YoY, followed by Delhi NCR

In Q2 2023, overall housing prices in Kolkata witnessed a 15% YoY rise, 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 extension of 2% reduction in stamp duty and extension of 10% reduced circle rates till September 2023.

Just a few paces behind Kolkata, Delhi NCR witnessed a 14% 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% and 40%, respectively, on 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.

Unsold inventory drops 7% YoY in Delhi NCR; only city in Pan India to witness a drop

The unsold inventory in Delhi NCR dropped 7% YoY, resulting to be the only city in Pan India to witness a drop, indicating continued healthy market dynamics. Unsold inventory in Delhi NCR has been witnessing a drop for the last two quarters, signaling positive consumer buying sentiment. 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 in by 26% and 24%, respectively, on YoY basis. 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 rise 10% YoY, amidst healthy demand momentum

Housing prices in Bengaluru surged 10% YoY during Q2 2023, with prices in Periphery and Outer West micro markets witnessing the highest rise of 42% YoY led by upcoming high-end projects. Housing prices of 3 BHK units surged the highest at 12% YoY followed by 2 BHK units owing to the rising demand for mid-segment residential properties.

“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,” said Pankaj Kapoor, Managing Director, Liases Foras.

Commenting on the report, Mohit Goel, Managing Director, Omaxe Ltd, said, “The increase in prices of residential properties was long overdue. For almost a decade, prices were stagnant and housing prices have started inching up in the last two years, mainly due to a rise in construction costs and a strong revival in demand. Yet, barring a few locations, the price appreciation has been modest and prices of properties continue to remain in affordable range.”