Realtors relish rising housing prices,buyers turn cautious

Demand for housing in the country’s key cities is on a rebound compelling leading developers to come up with quality properties, which has resulted in the housing prices increasing by eight per cent in the top eight cities YoY. The residential real estate is consolidating its strong momentum and all leading property developers are more or less on the same page on this.Housing prices surged in the first quarter of 2023 with the average price rise being close to seven per cent YoY, as reported by PropTiger.com, thanks to an upward movement in average rates of new homes. And now a joint study by CREDAI and Colliers India suggests that prices in key cities have gone up by eight per cent.

Data released by the National Housing Bank (NHB) reveals a substantial rise of up to 11 per cent in property prices across several cities. The city topping the list in terms of escalated property prices is Kolkata, experiencing a significant surge of 11 per cent. Following closely behind, Ahmedabad witnessed a rise of 10.8 per cent, Bangalore 9.4 per cent, Pune 8.2 per cent, Hyderabad 7.9 per cent, Chennai 6.8 per cent, Mumbai 3.1 per cent, and Delhi 1.7 per cent. There has been a significant increase during the last quarter of the fiscal year 2022-23 in 43 of the 50 prominent cities. While this may be good news for developers and investors, it is quite daunting a prospect for the buyers, particularly those keen on purchasing their first house.

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 due to consistent demand for the last one year.

A pause in the rising repo rate paired with healthy domestic economic outlook will keep the market sentiment upbeat, feel sector analysts.Despite the rise in housing prices, which is primarily because of 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 and bigger houses with better amenities.

Meanwhile, if one goes by the NDB statistics, some cities have experienced a decline in property prices as well. These include Navi Mumbai, Kochi, Coimbatore, Raipur, Faridabad, Delhi, Bidhannagar, and New Town Kolkata. Among these, Raipur observed the most substantial decline, with property prices dropping by 6.7 per cent. It is noteworthy that data provided by home loan companies' indicates an overall increase of 5.3 per cent in house prices during the fourth quarter compared to the previous year.

Taking all these factors into consideration, it can be said that the property market in India is experiencing significant fluctuations in prices across various cities. This makes it more compelling for people to be cautious and careful about this dynamic environment, prior to taking any investment decision.