Housing prices rise for 15th straight quarter in Q3 — 3 key trends to watch

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Average housing prices across the top 8 markets rose 11% YoY at ₹11,000 per sq ft in Q3 2024, but unsold inventory is still high

The outlook remains "strong" for the full year, with the demand stabilising across the top cities after record-high sales over the last two years.
The outlook remains "strong" for the full year, with the demand stabilising across the top cities after record-high sales over the last two years. | Credits: Getty Images

Housing sales in the top eight Indian cities continued to rise for the 15th consecutive quarter during Q3 2024, backed by sturdy demand and positive market sentiments. Three key trends that seemed to have emerged in the quarter are — steady sales, premiumisation, and a slowdown in new launches.

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1) Sales on the rise

Average housing prices across the top eight markets in India — Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, MMR, and Pune — rose 11% YoY at ₹11,000 per sq. ft. during Q3 2024, with all major cities recording an annual increase in prices, according to the latest CREDAI–Colliers-Liases Foras' housing price-tracker report for Q3 2024.

Delhi-NCR saw the highest rise in the third quarter at 32% YoY, followed by Bengaluru at 24%.

Boman Irani, president of private real estate developers' body CREDAI National says the rising housing prices are a validation of positive homebuyer sentiments. "We are seeing more aspirational homebuyers come to the fore – resulting in bigger homes that are also being reflected in the rise in prices as homes continue to get more expansive, truly reflecting the current market dynamics and consumer preferences."

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2) Premiumisation Story Continues

The luxury segment is still dominant, although there is a gradual reduction in new launches. "While MMR, Pune, and Hyderabad are reaching a plateau in sales and supply, NCR, Chennai, and Tier 2 cities have a deficient supply level; they may see a surge in new launches,” says Pankaj Kapoor, MD of Liases Foras.

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Delhi saw the launches of select marquee projects in the luxury and ultra-luxury segment in Q3 2024, which led to the highest 32% YoY increase in prices. Dwarka Expressway and Golf Course Extension/Sohna Road saw prices appreciate by 50% YoY.

Dhaval Barot, MD of Mumbai-based Bharat Realty Venture says that rising affluence among 'high-net-worth' individuals has bolstered demand for premium properties, and buyers increasingly view real estate as a stable, long-term investment rather than just a place to live. "While this broader economic pressure is put upon luxury properties, still the capital appreciation and potential yield on rentals make these the preferred choice. Another aspect that adds to their competitiveness is the limited availability of luxury homes in prime locations, which gives it an even higher value."

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3) Unsold inventory drops for 3rd quarter

At the end of September 2024, unsold inventory stood at over 10 lakh housing units across the eight major cities, with MMR accounting for a majority at about 40% share. The unsold units in Hyderabad saw a modest dip on a sequential basis despite a yearly increase of about 28%.

"Developers are being cautious with new launches. They are realigning their strategies by assessing and identifying the appropriate target audience in high-demand pockets," says Vimal Nadar, senior director and head of research, Colliers India.

Santosh Agarwal, CFO and executive director of realty firm Alphacorp, says there is a gradual reduction in new launches across top cities projects, with developers reassessing their strategies to meet evolving market dynamics. "The luxury segment remains dominant, but developers are exercising caution due to rising construction costs, regulatory compliance, and demand consolidation. We view this as a positive trend that prioritises quality over quantity, ensuring sustainable growth and long-term value creation for homebuyers."

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Although new launches have moderated in the affordable housing segment, developers have stepped up their offerings in luxury and ultra-luxury segments, which has led to price hikes for spacious units, says the CREDAI–Colliers-Liases report.

Yash Garg, director of real estate developer M3M Noida, says the deliberate and precisely calculated shift in new launches underscores a more strategic, demand-driven approach. "This recalibration is not a retreat but a refinement, reflecting a commitment through rising land values, meticulous regulatory alignment, and an unwavering focus on premium quality and timely delivery." Far from signalling a slowdown, it reinforces the leadership of the luxury segment, he adds.

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Although unsold inventory levels remain high, they continue to drop. Q3 saw the third consecutive quarter in unsold inventory, with 7 out of 8 cities seeing a dip in unsold inventory levels. At 13%, Pune saw the highest decline in unsold inventory levels annually. It was the 5th consecutive drop in inventory levels for the city.

Outlook remains 'positive'

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The momentum in housing market is expected to continue going into the new year, with the hopes of rate cuts in the impending future, says Irani of CREDAI.

The housing market is gradually stabilising, but the outlook for the residential segment remains "positive". "Developers are recalibrating their strategies, particularly in the price-sensitive segments, by offering compact size units,” says Badal Yagnik, CEO of Colliers India.

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Yagnik says despite rising prices, the likely easing of monetary policy and anticipated repo rate cuts can potentially bring financial relief to homebuyers in the near term. "Moreover, flexible payment plans and freebies to attract homebuyers will continue to aid in residential sales momentum."

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