Even as the real estate demand is rising in India after a two-year hiatus due to COVID-19, residential prices are also on the rise. Housing prices rose about 6 per cent on average during the April-June 2023 quarter, according to data from real estate brokerage PropTiger.com.
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According to the report titled ‘Real Insight Residential– April-June 2023’, Mumbai and Gurugram were the costliest housing markets in India with average prices at Rs 10,100 per square feet and Rs 7,000 per sq feet. However, Gurugram witnessed the highest jump in housing prices at 12 per cent during April-June 2023, followed by Bengaluru (9 per cent), Noida (8 per cent), Ahmedabad (7 per cent), and Delhi-NCR and Kolkata (6 per cent each).
The weighted average price of residential properties across eight major Indian cities reached Rs 7,000-7,200 per square foot during the April-June 2023 period. “This is a 6 per cent increase compared to the corresponding period in the previous year,” said the report.
The markets covered in the report are Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region, and Pune.
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According to the report, Ahmedabad experienced a 7 per cent year-on-year increase in prices during the second quarter of 2023, reaching Rs 3,700-3,900 per square foot. Bengaluru witnessed a 9 per cent increase, with prices averaging at Rs 6,300-6,500 per square foot.
In Chennai, prices rose 3 per cent to Rs 5,800-6,000 per square foot. Delhi-NCR observed a 6 per cent growth to Rs 4,800-5,000 per square foot. Meanwhile, Gurugram in the national capital region saw a 12 per cent appreciation, with prices reaching Rs 7,000-7,200 per square foot, and Noida experienced an 8 per cent rise to Rs 5,600-5,800 per square foot.
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Hyderabad registered a 5 per cent increase, with prices averaging at Rs 6,400-6,600 per square foot. Kolkata reported a 6 per cent rise, with prices reaching Rs 4,600-4,800 per square foot.
In Mumbai and Pune, both key property markets in Maharashtra, housing prices increased by 3 per cent each. Mumbai’s weighted average price stood at Rs 10,100-10,300 per square foot, while Pune’s rates were at Rs 5,600-5,800 per square foot.
Vikas Wadhawan, Group CFO of REA India and business head at PropTiger.com, said, “Housing prices have been climbing in major Indian cities in the post-COVID-19 years. While this upward trend in capital values is attracting investors to India’s key real estate markets, the increase in new supply is helping to moderate price increases.”
Ankita Sood, head (research) at REA India (PropTiger.com, Housing.com & Makaan.com) said, “We are witnessing a surge in demand from business and large companies in Gurugram. The city continues to dominate in terms of Grade A commercial development, solidifying its position as a top choice for business.”
Sood added that as a ripple effect, the Gurugram property market has seen good traction for both luxury and mid-segment housing. Gurugram saw a YoY weighted average property price increase of 12 per cent in Q2 2023, surpassing Bengaluru (9 per cent) and Noida (8 per cent).
She also said, “Surge in demand is driven by consumers seeking improved amenities and an enhanced lifestyle, migrating from conventional property formats in Delhi and neighbouring areas. Additionally, the limited supply has also contributed to the momentum in prices.”
During the April-June period, housing sales across the eight major cities experienced an 8 per cent annual increase, to 80,250 units. The growth in sales can be attributed to increased demand, especially in Mumbai and Pune. In the same period last year (April-June 2022), sales stood at 74,320 units in the primary residential markets of the top eight cities.
What Industry Players Say
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Ravi Aggarwal, managing director of Signature Global (India) Ltd, said, “We believe in the power of Gurugram’s limitless potential. The real estate market in Gurgaon is a shining example of this. With a low supply, high aspirations, and a substantial gap between Delhi and Gurgaon property rates, the potential for growth is immense. Backed by thriving infrastructure, burgeoning businesses, and abundant job opportunities, Gurgaon is ready to embrace the future.”
Mohit Jain, managing director of Krisumi Corporation, said, “After being in stagnation mode for almost a decade, housing prices have started rising from the last two years, fuelled by a surge in construction costs and a strong revival in demand.”
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He added that the price appreciation has been modest so far, barring a few locations which have seen a huge increase. The increase in prices has been meagre when compared to the increase in the cost of raw materials like steel, cement etc.
“An increase in per square feet rate coupled with around 3 percentage points hike in mortgage rate, has definitely hit affordability, but not enough to hit sales,” Jain said.
