Property prices in India’s top residential markets have continued to strengthen over the past year due to an increase in construction costs, online property brokerage firm PropTiger.com said in a report. PropTiger.com, a subsidiary of REA India, the owner of Housing.com, revealed that average property prices in most cities saw double-digit growth in the third quarter of 2024 compared to the same period last year.
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The report ‘Real Insight Residential: July-September 2024’ linked the increase in prices to a rising demand, notably for upscale properties. The Delhi-NCR property market experienced the highest annual price surge of 57%, as stated in the report.
“The fact that the Reserve Bank has maintained a status quo on the repo rate at 6.5% in the past 10 policy meetings is adding further pressure on pricing. In the absence of a rate cut, developers as well as buyers continue to pay a comparatively high interest on loans, which ultimately impacts housing affordability,” the report said.
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According to the report, adjustments to the basic selling price (BSP) of residential units in this market have become essential due to the increasing construction costs. The combination of high demand from end-users for luxury properties and a resurgence in investor confidence has driven the upward movement of housing prices in this area.
The cities of Ahmedabad and Mumbai in the west, as well as the tech hub of Bengaluru in the south, all saw a price appreciation in the range of 15-21%. On the other hand, Chennai in the south and Kolkata in the east experienced a 22% growth compared to the previous year, indicating strong economic activity and housing demand in these metropolitan areas. This trend signifies a sustained demand in these crucial economic hubs.
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Pune, often considered a more affordable alternative to Mumbai, also witnessed an 18% increase, demonstrating its continued appeal to homebuyers while experiencing significant price growth.
Hyderabad, renowned for its IT sector, had the lowest growth at 7%, suggesting a more stable and mature market.
“Looking ahead, the real estate sector is poised to play a pivotal role in India’s economic narrative, driven by factors such as infrastructure development, smart city initiatives, and the growing prominence of tier-2 and tier-3 cities. The long-term outlook for Indian real estate remains robust, offering diverse opportunities across residential, commercial, and emerging asset classes for those who approach the market with a strategic, forward-looking perspective,” said Vikas Wadhawan, CFO, REA India & Business Head, PropTiger.com.
