Housing prices across the top eight cities in India (Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad) rose 6% year-on-year during the quarter ended September amidst robust housing demand and new launches by developers, according to a joint report by CREDAI – Colliers - Liases Foras.
Delhi-NCR saw the highest increase in residential prices at 14% year-on-year, followed by Kolkata and Ahmedabad with 12% and 11%, respectively, the Housing Price-Tracker Report 2022 says.
In Delhi-NCR, Gurugram's Golf Course Road saw the highest price rise of 21%, followed by Ghaziabad.
Housing prices have been on the rise on the back of increased demand seen since last year, paired with rise in input prices. New launches have witnessed a jump since the beginning of the year as the market regains momentum after a hiatus, despite rising interest rates and input costs, the report says.
Unsold inventory rose 3% year-on-year. Owing to the spike in launches in the past few quarters, around 94% of the unsold inventory in India is under construction. Majority of the cities saw a dip in unsold inventory, with Bengaluru witnessing the steepest decline of 14% YoY, led by higher sales. Only Hyderabad, MMR and Ahmedabad saw an increase in unsold inventory, led by significant new launches. MMR continues to account for the highest share in unsold inventory at 37%, followed by 13% in Delhi- NCR and Pune each.
"The real estate market across the country has witnessed a K-shaped recovery in terms of prices, the consumer sentiment has continued to stay robust as the pandemic reshaped the importance of owning a home rather than renting one. With the festive period expected to continue till the end of this year, we can expect sales to be northbound and the number of unsold inventories to decline as well," says Harsh Vardhan Patodia, president of CREDAI National.
While there has been a rise in housing prices in line with the global inflationary trends, the market can expect the prices to continue to rise owing to the robust demand, says Patodia, adding that the industry has embarked towards solidity after a let-up due to the pandemic and should be able to stabilise in the first half of 2023.
After uncertainty in the past two years, 2022 has ushered in relative stability and recovery for the residential market across top eight cities, says Ramesh Nair, chief executive officer - India and managing director, market development - Asia, Colliers. "The rise in inflation and hike in input costs have put upward pressure on housing prices pan-India. Several developers have launched projects and offered rebates during the festive period. While residential activities continue to remain strong, recessionary pressures may have an impact on the salaried class, who form a notable share in homebuying in the top Indian cities," Nair adds.
According to Pankaj Kapoor, managing director, Liases Foras, the aggregated sales of three-quarters of calendar year 2022 are 16% higher than the aggregate similar three quarter sales of CY21. "Despite increasing interest rates and marginal property prices, there is still a parity between the prices and affordability; sales volumes are likely to stay strong. The year 2022 is slated to pose the highest ever sales in the residential market in India," he says.