Despite an 8.3% rise in residential prices, a notable increase in residential demand (searches) was witnessed across the top Indian cities between July and September 2024, which rose by 12.3% quarter-on-quarter (QoQ), as reported by the latest PropIndex Report (Jul-Sep 2024) by Magicbricks.
The report, which draws insights from the preferences of over 20 million users on the Magicbricks platform, highlighted that cities such as Noida (16.9% QoQ), Gurugram (15.5% QoQ), and Greater Noida (15.1% QoQ) experienced the most significant increases in residential prices during this timeframe.
As per the findings, the average price in Noida reached Rs 11,625 per square foot, compared to Rs 9,945 per square foot in the preceding quarter. In Gurugram, average property rates climbed to Rs 14,650 per square foot, while in Greater Noida, they rose to Rs 7,752 per square foot between July and September 2024.
Also Read: Income Tax Notice: How to respond to a notice for defective tax return
Commenting on the trends, Abhishek Bhadra, Head of Research at Magicbricks, said, “The residential real estate market is witnessing strong interest for both primary homeownership and investment. Demand is increasing at its highest pace in the past two years, with satellite cities around major urban centers such as Delhi and Mumbai attracting significant attention. Possibly there is also a fear of missing out (FOMO) among investors, which continues to drive market activity. However, as more supply enters the market, residential prices are expected to continue rising in the short term, though at a more moderate pace.”
The report further observed that growing interest in under-construction properties has resulted in a capital appreciation of 11% QoQ across the tracked cities, with significant growth seen in Thane (19.5% QoQ), Gurugram (17.3% QoQ) and Noida (14.5% QoQ). Additionally, the report indicated that demand for 3BHK units continues to dominate, accounting for 50% or more of total demand in most cities, except for Chennai, Navi Mumbai, and Thane, where 2BHK units remain the preferred choice.
Commenting on the findings of the reposrt, LC Mittal, Director, Motia Group, said, the report shows a favorable picture of the real estate sector in India. “This bump and the 8.3% rise in residential prices are a good indication of growth in consumer confidence and a positive market situation. In particular, the NCR, which includes Noida, Gurugram, and Greater Noida, recorded residential rate increases of 16.9%, 15.5% and 15.1%, respectively, with Noida taking the lead and projecting the most growth rate in the unexplored reckless and risk exploration of construction. These figures are indicative not only about the increasing beholding of these satellite cities but also about the paradigm shift in urbanization. As working from home becomes increasingly prevalent, purchasers appear to prioritize larger residences situated away from commercial hubs rather than seeking properties within business districts. This trend has the potential to transform urban planning, necessitating adjustments in the types of amenities and infrastructure required, and may also influence corporate perspectives on real estate in the foreseeable future.”
Aman Gupta, Director of RPS Group, said, “One intriguing observation that can be drawn from the this report is this growing appetite for under-construction properties, leading to a capital appreciation of 11% quarter-on-quarter across all the cities, included in the report. This is most notable in Thane, Gurugram and Noida where the growth rates corresponded to 19.5%, 17.3% and 14.5%, respectively. Such a change is indicative of a developing market where consumers’ tendency to wait has improved perhaps helped by the low prices together with high returns. With such properties, consumers are gaining confidence which could be attributed to the influence of regulations such as RERA, improving accountability in the sector. Apart from that, it may suggest that this is a tactical reaction to the current shortage of marketable assets in highly sought-after locations. As this trend gathers pace, it could trigger an upsurge in the launching of projects which could ease up the supply gap in the principal markets.”
The PropIndex Report also focuses on one interesting issue regarding the evolution of housing needs in India: the overwhelming presence of 3BHK units in most cities accounting for more than half of overall demand.
“The growth in preference for bigger homes, however, may be a result of the changes brought about by the pandemic where the home has become both an office and a classroom and a place of fun. This wish is, however, not consistent in all markets. Two BHK units are still more preferred in cities such as Chennai, Navi Mumbai and Thane, making clear the extra care that should be taken regarding the characteristics of the housing market. This difference in preference across cities also calls for the need for localization in terms of strategies that will be adopted by both the developers and the policymakers instead of blanket strategies,” said Keshav Mangla, General Manager- Business Development, Forteasia Realty Pvt Ltd.
Gunjan Goel, Director at Goel Ganga Developments, said, “The report indicates that there is a more granular assessment of the Indian residential real estate market than was initially anticipated. The general picture of the economy remains satisfactory, with a 12.3% growth in demand and an 8.3% increase in prices, in particular the market is more illustrative at the level of cities. For example, in Noida the average property rates have shot through the roof to Rs 11625 per sq ft, up from the peak of Rs 9945 in the last quarter. Such virtual genesis in Noida which many are struggling to keep up even with their more established cousins can mean a threat to the real estate NCT hierarchy. Further, in Chennai, the continuing demand for 2BHK units, in spite of the 3BHK trend, depicts how these sociocultural attitudes continue to affect housing patterns.”
The diverse trends observed in the Indian real estate market highlight its multifaceted nature and the traditional perspectives of its participants. “For investors, developers, and policymakers, the message is unequivocal: attaining favorable outcomes in the Indian residential real estate sector is feasible. It is essential to adhere to local market insights and implement a region-specific market strategy,” added Goel.
