Housing prices rise 8% in Q1 as demand for homes goes up
Top eight cities continued to witness a rise in new launches, as developers planned to tap the rising demand
image for illustrative purpose
Mumbai Housing prices across the top eight cities in India increased 8 per cent YoY amidst strong housing demand and consistent quality launches by top developers. Delhi-NCR saw the highest increase in residential prices at 16 per cent YoY, followed by Kolkata and Bengaluru with 15 per cent and 14 per cent YoY increase respectively.
Despite rising interest rates, housing prices have been on the rise led by consistent demand seen since last year. As the interest rates are now expected to have peaked, a pause in the rising repo rate paired with healthy domestic economic outlook will keep the market sentiment upbeat.
Credai President Boman Irani, said “Owing to a conducive buying eco-system, homebuyers’ sentiment has been quite positive for the past few quarters. This is also validated by the sheer volume of sales that we have been witnessing in the recent past, especially in Tier 1 cities across India”.
Despite the rise in housing prices, which is primarily owing to rising raw material costs and this consistent demand, we expect the strong momentum to continue as consumers have shown a clear appetite to buy new, bigger houses with better amenities – especially in the post pandemic era. There is also a greater thrust on Green Development projects, with homebuyers inclined towards sustainable houses that are beneficial not just to the environment but also financially, in the long term.”
The top eight cities continued to witness a rise in new launches, as developers planned to tap the rising demand, owing to which the overall unsold inventory rose 12 per cent YoY. With a spurt in new
launches, about 95 per cent of the unsold units in the top cities were under construction. Hyderabad saw the highest jump in unsold inventory levels, at 38 per cent YoY. At the same time Delhi NCR,
Bengaluru and Chennai saw a dip in unsold inventory, on the back of significant rise in sales. MMR continued to account for the maximum share in unsold inventory at 37 per cent, followed by Pune at 13 per cent.
“The residential real estate in India bounced back post the pandemic and continues its strong momentum since the last year. Aided by increased preference for home ownership, relative affordability, quality supply, the sector has remained resilient, offsetting the challenges posed by higher interest rates amidst global headwinds. Given the positive market fundamentals, both end-users and investors can find their sweet spot in this sturdy market. Amidst this upswing, housing prices in India witnessed an 8 per cent YoY rise during the first quarter of 2023,” said Peush Jain, Managing Director, Occupier Services at Colliers India.
“Despite a 250-basis point increase in the RBI's repo rate since May 2022, the residential sector in India remained resilient through 2022 and in Q1. The resultant increase in home loan interest rates, did not defer demand, as the momentum of sales continued unabated. With developers focusing on delivering relevant supply at the right price & location, residential real estate is expected to remain promising in 2023,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.
