India’s real estate sector has seen a tremendous boom in the post-COVID-19 era. House prices in the country’s top cities have increased by an average of 48%. This figure has come to light in the new report of 1 Finance Housing Total Return Index (TRI), which is based on RERA registered property transaction data.
Which city has the most expensive real estate market in India?
-Property prices have increased the most in Bengaluru by 79%.
-Mumbai has become India’s most expensive housing market with Rs 26,975 per square feet.
-Demand increased so much in Delhi-NCR that unsold inventory decreased by 30% in the last 5 years.
-In Pune, developers reduced new project launches by 20% in view of the situation.
-In Hyderabad, the situation is the opposite—there was so much supply compared to demand that unsold inventory increased by 177%.
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-There is also an imbalance in Chennai: launches increased by 51%, but sales grew only by 10%.
-Kolkata is the only city where both launches and sales declined by 29%.
Will home prices rise further across major cities in India?
The report shows that between 2020 and 2025, launches of new homes in major Indian cities increased by 10%, but sales increased by 33%—that is, demand has grown faster than supply. This indicates that real estate prices have not yet peaked, and there is a possibility of further increase.
However, experts believe that the rapid increase after Covid will not be seen again. Prices will rise at a steady pace in the coming years, based on strong buyer demand and infrastructure upgrades by the government.
Buyers are confused, take decisions thoughtfully, not emotionally
Sharing his viewpoint on this constant dilemma, Animesh Hardia, Senior Vice President of Quantitative Research at 1 Finance, said, “With our financial advisory clients, we’re seeing two very different stories. Clients who already own a property are benefiting from the recent price appreciation, but it’s the potential buyers who are facing a challenge. Many are worried about missing out while also being concerned about buying at peak prices, and this uncertainty is pushing them to make rash, emotional decisions.”
What these buyers really need is a combination of a real estate expert and a financial advisor – qualified people who can look at the numbers objectively and help them make an informed decision, whether a purchase makes sense for their life and financial situation, rather than getting caught up in market hype or family pressure.”
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Summing up…
India’s housing market is currently moving towards stable and sustainable growth. The post-Covid boom will definitely slow down a bit, but the demand will remain strong. New opportunities are being created in real estate, especially in big cities and areas connected to them, due to better connectivity and public infrastructure.