Hyderabad: Residential real estate asset prices have risen continuously since 2013 and, in the last two years, they have appreciated at a CAGR (Compound Annual Growth Rate) of 13 per cent, while CPI inflation moderated by 1.3 per cent on an annual average basis. This trend signifies a clear outperformance of real estate prices compared to inflation, an Anarock research said.

A residential unit price in FY22 was Rs 5,881 per sft while the inflation rate during that period was 5.50 per cent. In FY23, while the inflation rate stood at 6.70 per cent, the price of houses climbed to Rs 6,325 per sft. As inflation moderates at 5.40 per cent in FY24, the rate of residential buildings has soared to Rs 7,550 per sft, across top seven cities in India. Shobhit Agarwal, MD and CEO, Anarock Capital, said: “After the 2019 elections, average residential prices across the top seven cities have appreciated at a CAGR of six per cent, rising from Rs 5,600 per sft in June 2019 to Rs 7,550 per sft by the end of FY 2024. A similar trend was witnessed in relation to the 2014 elections. Average price across the top seven cities saw an annual rise of over six per cent in 2014 when compared to the preceding year, that is, from Rs 4,895 per sft in 2013 to Rs 5,168 per sft in 2014.”

In the last decade, there were periods when the supply of real estate assets exceeded demand, resulting in stable price growth that kept pace with inflation in the pre-pandemic era. Between 2013 and 2020, the top seven cities recorded a cumulative supply of 23.55 lakh units against a demand for 20.68 lakh units, the research pointed out in the supply and demand dynamics.

Following the pandemic, residential real estate saw rapid recovery, leading to significant price rise that outpaced general inflation.