Study Finds 31% Spike in Prices for In-Progress Homes; Bengaluru, Pune, and 5 Cities Witness 14% Surge in Quarterly Housing Sales

In the first quarter of 2024, the Indian housing market continued its robust performance, marking a significant milestone. According to the latest data from Anarock, quarterly housing sales reached an all-time high in the last decade, with approximately 1, 30,170 units sold across the top 7 cities. This represents a remarkable 14% increase compared to the same period in 2023 when around 1, 13,775 units were sold.

Anuj Puri, Chairman of Anarock Group, highlighted that Mumbai Metropolitan Region (MMR) and Pune contributed significantly to this growth, accounting for over 51% of total sales in the top seven cities. MMR experienced a 24% yearly increase, while Pune saw a rise of over 15%. Despite new launches exceeding one lakh units, there was only a marginal 1% rise compared to the previous year. Notably, MMR and Hyderabad saw the maximum new supply, making up 51% of total new launches. Additionally, it's worth noting that there was a significant 31% increase in house prices during construction.

However, while new launches remained steady, available inventory in the top seven cities declined by 7% annually, dropping from approximately 6,26,750 in Q1 2023 to around 5,80,890 in Q1 2024. NCR experienced the most significant decrease in unsold stock, declining by 27% compared to other major cities. Looking ahead, forecasting future trends in construction will be crucial to understanding market dynamics.

The economic outlook of India remains positive as the GDP growth rate of the country being the highest across the globe, and inflation under control.

Breaking down the new launches in metropolitan cities, MMR, Hyderabad, Pune, and Bengaluru were the key contributors, accounting for 83% of the quarter's supply addition. MMR witnessed approximately 33,800 units launched, with a focus on the sub-Rs 80 lakh budget segment. Hyderabad experienced a significant yearly jump of 57%, with over 31% of new supply in the high-ticket price segment (>Rs 1.5 Cr). Pune saw a slight decrease of 3%, while Bengaluru recorded a 22% yearly increase, primarily in the premium and mid-range segments.

The impact of rising construction prices on homebuyers remains a concern, influencing purchasing decisions and affordability across the market. Factors contributing to the rise in housing prices during construction include increased demand, supply chain disruptions, and escalating costs of raw materials.

The average residential property prices across the top seven cities have seen a substantial increase, ranging between 10-31% in Q1 2024 compared to the same period last year. Rising construction costs on housing prices is attributed to rising construction raw material costs and overall increased demand, with Hyderabad and Bengaluru recording the highest annual price jumps of over 31% and 25%, respectively.