Since the 2019 elections, residential property prices in India's top seven cities (Mumbai, Delhi, Bengaluru, Chennai, Pune, Hyderabad, and Kolkata) have increased at a Compound Annual Growth Rate (CAGR) of 6%, according to Anarock. Prices rose from INR 5,600 per square foot in June 2019 to INR 7,550 by March 2024. This trend mirrors post-2014 election patterns, indicating potential links between economic optimism and real estate investments. Despite the pandemic, strong demand and limited supply have driven prices up, suggesting robust long-term investment potential in India's major cities.
Residential property prices in India have exhibited a noteworthy trend following the 2019 elections. Data from Anarock, a leading real estate consultancy, reveals that average prices across the top seven Indian cities (likely Mumbai, Delhi, Bengaluru, Chennai, Pune, Hyderabad, and Kolkata) have grown steadily at a Compound Annual Growth Rate (CAGR) of 6% since then. This translates to a significant price increase, rising from INR 5,600 per square foot in June 2019 to INR 7,550 per square foot by the end of March 2024.
Interestingly, this growth trend appears to be linked to election cycles. Anarock observed a similar pattern following the 2014 elections, with average prices rising by over 6% annually between 2013 and 2014. This suggests a potential connection between economic optimism and real estate investment decisions during these periods.
Prior to the pandemic, the Indian real estate market experienced a period of balanced growth. Looking back at the period between 2013 and 2020, the supply of new housing units in the top seven cities (23.55 lakh units) largely matched demand (20.68 lakh units), leading to stable price increases that kept pace with inflation. In fact, the total supply of new units even slightly outweighed demand. This resulted in a peak available inventory of around 8 lakh units by the end of 2016.
However, the COVID-19 pandemic significantly impacted the market. Following the initial shock, the residential real estate sector witnessed a rapid recovery. This surge in demand, coupled with a limited supply of new units due to pandemic disruptions, has driven prices upwards at a rate exceeding general inflation.
This trend highlights the potential of the Indian real estate market for long-term investment. While economic cycles and government policies can influence short-term fluctuations, the long-term demand for housing in major cities remains strong. This, combined with a potential post-pandemic construction boom to meet the increased demand, suggests the market could offer continued growth opportunities for investors.
Since 2019, the average residential price in the top seven cities has grown at a compound annual growth rate (CAGR) of 6%. From June 2019 to March 2024, prices have increased by INR 1,950 per square foot, rising from INR 5,600 to INR 7,550. Between 2013 and 2020, 23.55 lakh new housing units were supplied in these cities, while the demand for new housing units during the same period was 20.68 lakh units. The peak available inventory of new housing units reached around 8 lakh units in 2016.
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