Housing prices in top 8 markets rise average 10% on-year in Q1: Report

MUMBAI | BENGALURU: Amidst sustained positive sentiment in residential real estate, average housing prices across top eight Indian cities have risen 10% from a year ago during the January-March quarter, showed a joint report by CREDAI, Colliers and Liases Foras.

While each of the top eight cities witnessed annual price appreciation, average housing prices in Bengaluru, Delhi NCR, Ahmedabad, and Pune registered double-digit growth.


On a sequential basis too, housing prices across the majority of the cities witnessed a noticeable 2-7% increase, the report showed.

Although the market continued to be largely favorable for both homebuyers and developers, unsold inventory at an India level witnessed a marginal 3% on-year increase.

Notably, Pune led with a significant 10% on-year drop in unsold inventory, closely followed by Delhi-NCR and Ahmedabad, each recording an 8% annual reduction.

As of March end, unsold inventory across the top eight cities stood close to 10 lakh units, with MMR alone having almost a 40% share. Interestingly, robust demand momentum led to a slight drop in unsold units every quarter.

Although Hyderabad and Bengaluru witnessed yearly increases in unsold inventory, both cities saw a slight quarterly dip. Developers are likely to keep a close watch on available stock and anticipated demand while timing their new launches in the near term.

“The surge in housing prices is a direct consequence of the robust housing demand that we’re witnessing - especially in premium and luxury housing - by homebuyers across the country. These are directly linked to not just a stable lending eco-system but also the emergence of various micro-markets that have been the primary beneficiaries of significant infrastructure projects - which has altered the demand-supply dynamics in residential real estate,” said Boman Irani, President of CREDAI National

He does not foresee the momentum to slow down in the current financial year either.

“This upward price trend reflects the resilience and dynamism of the residential sector, buoyed by factors such as stable repo rates and infrastructure upgrades across most of the major Indian cities. With prospects of a reduction in benchmark lending rates in the ongoing fiscal year, affordability can improve in the near term, especially for the EMI-dependent home buyers,” said Badal Yagnik, Chief Executive Officer, Colliers, India

“Factors like luxury demand, upcoming infrastructure projects, and strategic launches drive these price increases. With moderate inflation and interest rates, the real estate sector is expected to maintain demand due to affordability. The prices could increase by 10-15%, bridging the gap between affordability and inflation-adjusted prices,” said Pankaj Kapoor, MD, Liases Foras.

Bengaluru witnessed the most significant annual price surge among India's top eight cities, with prices soaring by 19%. Within Bengaluru, the Periphery and Outer East micro market saw the steepest upward movement at a 32% YoY increase. It was followed by the Periphery and Outer North with 18% annual growth in average housing prices.

In Delhi NCR, housing prices saw a substantial annual increase of 16%, with Dwarka Expressway, notably witnessing a 23% increase in average capital values. With a significant number of new launches, the trend is likely to continue in residential catchment areas along Dwarka Expressway throughout 2024.

Of the eight major cities, Pune witnessed the steepest drop in unsold inventory levels. The 10% YoY decline in unsold units, highlights strong housing demand across the city. The reduction in unsold units coincides with a major 13% annual rise in average housing prices here.