Housing prices surge 20% in 2 yrs

Mumbai: The housing prices surged by 20 per cent from 2021 to 2023, led by significant growth in demand says a report by Credai– Colliers - Liases Foras Housing Price-Tracker Report.

Amidst unwavering homebuyer confidence aided by a favourable interest rate cycle and positive economic outlook, housing demand scaled up and prices across the top eight cities in India surged by about 20 per cent in the last two years (2021-2023).

Talking to Bizz Buzz, Sunil Dewali, Co-CEO of Andromeda Sales & Distribution, parent company of Andromeda Realty Advisors, says, “The real estate market experienced a prolonged period of stagnation from 2013 to 2020, characterized by minimal buyer activity and a lack of investor interest.”

However, in recent years, there has been a notable surge in demand from end-users in the housing sector. This uptick in demand has led to a reduction in unsold inventory, resulting in a healthier balance between supply and demand in the market, he said. Property prices have seen a considerable increase in areas where demand is high, while even regions with relatively lower demand have witnessed price appreciation.

Akhil Saraf, Founder and CEO, Reloy says, “Several factors are contributing to the upward trajectory of property prices in the housing sector. Primarily, the surge in demand coupled with a dwindling inventory has exerted upward pressure on prices. Additionally, developers are introducing new projects with added amenities, further enhancing the appeal of properties and driving prices higher.”

This combination of increased demand, limited supply, and improved offerings from developers is fueling the continuous rise in property prices within the housing sector, he said.

Bengaluru, Delhi NCR, and Kolkata have witnessed the highest rise in average housing prices at about 30 per cent in 2023 compared to 2021 levels. This robust growth is underpinned by a notable uptick in housing demand, particularly in the mid and luxury segments. Amidst significant new launches, developers were able to successfully pass on the rising cost of construction in most cases.

Overall, the unsold inventory saw a notable drop in 2021 and largely continued to remain range bound until 2023 end, despite significant influx of new supply. During 2022 and 2023 housing markets across the major cities saw an increase in new property launches, in mid and luxury segments.

In cities like Bengaluru, Hyderabad, Kolkata, MMR, and Pune new supply surged 2-2.5 times in the last two years, reflecting robust activity and improved developer-market sentiment. With healthy visibility of upcoming projects from established developers and unchanged repo rate, the residential market will see sustained growth in the short to medium term.