India, 15th May, 2024 - A strong performance is evident in the Indian residential real estate market during the first quarter of 2024. Year-on-year price appreciation for housing reached a notable 10% nationally, with all eight major cities experiencing growth. Notably, Bengaluru, Delhi NCR, Ahmedabad, and Pune witnessed price increases exceeding 10% annually. This positive trend is further accentuated by a 2-7% price increase observed on a quarterly basis across most cities.

While these figures paint a favourable picture for both homebuyers and developers, it's important to acknowledge a marginal 3% year-on-year increase in unsold inventory at the national level. However, a closer look reveals a more nuanced story. Pune stands out with a significant 10% year-on-year decline in unsold units, followed by Delhi NCR and Ahmedabad, which each boast an 8% annual reduction. As of Q1 2024, approximately 1 million unsold units remain across the top eight cities, with Mumbai Metropolitan Region (MMR) holding nearly 40% of this inventory. Interestingly, despite the annual increase in unsold stock, robust demand has resulted in a slight quarterly decrease. Notably, even cities like Hyderabad and Bengaluru, which witnessed annual hikes in unsold inventory, experienced a positive quarterly trend.

This interplay between rising prices, healthy demand, and unsold inventory is a key factor that developers will undoubtedly monitor closely. By analysing available stock and anticipating future demand, developers can strategically time their new project launches to optimize their success in the near future.

Mr. Boman Irani, President of CREDAI National stated, “The surge in housing prices is a direct consequence of the robust housing demand that we’re witnessing - especially in premium and luxury housing - by homebuyers across the country. These are directly linked to not just a stable lending eco-system but also the emergence of various micro-markets that have been the primary beneficiaries of significant infrastructural projects - which has altered the demand-supply dynamics in residential real estate and we do not foresee this momentum to slow down in FY24/25 as well. “

"Residential real estate in India continued to benefit from positive sentiments in the first quarter of 2024, with average housing prices increasing by an impressive 10% on an annual basis. This upward trend reflects the resilience and dynamism of the residential sector, buoyed by factors such as stable repo rates and infrastructure upgrades across most of the major Indian cities. With prospects of reduction in benchmark lending rates in the ongoing fiscal year, affordability can improve in the near term, especially for the EMI dependent home buyers”, added, Badal Yagnik, Chief Executive Officer, Colliers, India

Further illustrating the market dynamics, a closer look at average apartment prices per square foot across these eight major cities in Q1 2024 reveals variations. Mumbai Metropolitan Region (MMR) commanded the highest price point at ?20,361, followed by Hyderabad at ?11,323 and Bengaluru at ?10,377. Conversely, Ahmedabad offered the most affordable option at ?7,176 per square foot. Year-on-year comparisons showcase significant growth across all cities, with Bengaluru leading the pack at a remarkable 19% increase. Ahmedabad and Pune followed closely behind with a 13% annual jump each. Kolkata experienced the most modest annual growth at 7%. Quarterly trends also point towards price appreciation in most cities compared to Q4 2023. MMR witnessed the highest quarterly increase at 2%, followed by Delhi NCR at 6% and Ahmedabad at 7%. Notably, Chennai and Kolkata were the exceptions, with prices remaining flat compared to the previous quarter. Source: Liases Foras, Colliers

“In the top 8 cities of India, property prices have seen a notable 10% year-on-year increase, alongside strong sales, and new supply introductions. Bengaluru leads with a 19% spike in housing prices, followed by significant escalations in Delhi NCR, Hyderabad, and Pune. Factors like luxury demand, upcoming infrastructure projects, and strategic launches drive these increases. With moderate inflation and interest rates, the real estate sector is expected to maintain demand due to affordability. The prices could increase by 10-15%, bridging the gap between affordability and inflation-adjusted prices.” said Pankaj Kapoor, Managing Director, Liases Foras.

At 19% YoY increase, Bengaluru saw the highest price rise across top eight cities

Bengaluru witnessed the most significant annual price surge among India's top eight cities, with prices soaring by 19%. Within Bengaluru, the Periphery and Outer East micro market saw the steepest upward movement at 32% YoY increase. It was followed by the Periphery and Outer North with 18% annual growth in average housing prices. Key IT hubs like Whitefield and KR Puram witnessed notable demand for spacious units, particularly 3BHK and 4BHK configurations.

In Delhi NCR, housing prices saw a substantial annual increase of 16%, with Dwarka Expressway, notably witnessing a 23% increase in average capital values. With significant number of new launches, the trend is likely to continue in residential catchment areas along Dwarka Expressway throughout 2024.

Unsold inventory in Pune witnessed the steepest drop at 10% YoY

Of the eight major cities, Pune witnessed the steepest drop in unsold inventory levels. The 10% YoY decline in unsold units, highlights strong housing demand across the city. The reduction in unsold units coincides with a major 13% annual rise in average housing prices. This price growth was driven by substantial launches in the high-end and luxury segments. Key localities like Camp and Baner witnessed significant YoY price increases, ranging between 20-23%. Going ahead, with continued progress on key infrastructure projects such as Metro Line 3 & Pune Ring Road, and completion of marquee Grade A commercial developments, areas like Baner, Chinchwad, Shivaji Nagar, and Nagar Road are likely to witness high residential activity in the near to mid-term.

“Demand for housing units across categories, especially luxury and ultra-luxury segments has remained upbeat for the last few quarters. While Mumbai and Delhi have been featured regularly in the global list of cities with highest millionaires, Bengaluru promises to be a fast-emerging city in terms of wealth accumulation and growth in millionaire population. As a growing economic hub, Bengaluru has seen significant launches in luxury residential projects, especially in the Periphery & Outer North micro market. Residential developers are likely to further capitalize on the growing demand in the luxury/ultra-luxury segment and launch more upscale projects catering to the discerning tastes of affluent homebuyers.” said Vimal Nadar, Senior Director and Head of Research, Colliers India.