Delhi-NCR records steepest increase in housing prices – Here’s why
India’s real estate market has seen a notable surge in home prices, particularly in the Delhi-NCR region, which has witnessed a staggering 16% year-on-year increase. This data comes from a recent CREDAI, Colliers, and Liases Foras survey. The report reveals that the top eight cities in India, namely Delhi-NCR, Pune, Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, and the Mumbai Metropolitan Region, collectively observed an overall 8% rise in housing prices during the first quarter of 2023.
This upward trend in home prices signifies a robust real estate market in India, with multiple cities experiencing significant growth. Delhi-NCR stands out with its substantial 16% year-on-year increase, showcasing a strong demand for residential properties in the region. Other cities like Pune, Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, and the Mumbai Metropolitan Region also witnessed positive growth in housing prices, contributing to the overall 8% rise across the surveyed cities.
The factors driving this surge in home prices may vary across different cities. Factors such as increased demand for housing, favourable economic conditions, infrastructure development, and growing urbanization could have played a role in the price appreciation. Factors like the limited supply of residential units, improved connectivity, and attractive investment opportunities in the real estate sector might have contributed to the upward trajectory of prices.
It is important to note that these findings are based on the data collected during the first quarter of 2023. Real estate markets are dynamic and subject to various influences, including economic conditions, policy changes, and market forces. Therefore, it is essential for homebuyers, investors, and industry experts to closely monitor the real estate landscape to make informed decisions.
The significant rise in home prices indicates a positive sentiment in the real estate market, potentially signalling growth and opportunities for developers, investors, and homeowners. However, it is crucial for buyers to conduct thorough research, seek professional advice, and evaluate their financial capabilities before making any property-related decisions.
Overall, the survey’s findings highlight the upward trend in housing prices across key cities in India, with Delhi-NCR leading the pack. This growth in home prices reflects the evolving dynamics of the real estate market and underscores the importance of staying informed and proactive in navigating the property landscape.
According to Manoj Gaur, Chairman & Managing Director of Gaurs Group, the robust development of infrastructure, particularly in Noida and Gurugram, has played a significant role in driving real estate growth in the National Capital Region (NCR). This growth in the market comes as a positive sign after a few years of sluggish performance. Gaur attributes this upturn to the aspirations of consumers for an enhanced lifestyle, the availability of superior projects in the market, and the presence of reliable developers.
The improvement in infrastructure, including the development of roads, transportation networks, and social amenities, has contributed to the overall growth of the real estate sector in Noida and Gurugram. These developments have enhanced the connectivity and livability of these regions, making them attractive for homebuyers and investors.
Gaur further emphasizes that the present surge in home sales is highly encouraging for the industry. It indicates a positive market sentiment and reflects the increasing aspirations of contemporary home buyers. The demand for residential properties has been driven by consumers’ desire for better living standards, improved amenities, and modern features.
To meet the rising expectations of homebuyers, developers have been introducing new projects that align with contemporary lifestyles and offer superior quality. This focus on meeting consumer demands has resulted in the availability of a wide range of options in the market, catering to various budgets and preferences.
The presence of reliable developers in the market is another factor contributing to the growth in home sales. Homebuyers increasingly seek projects by reputable developers who prioritize quality, timely delivery, and customer satisfaction. The trust and confidence placed in these developers have played a significant role in boosting the overall market sentiment.
In conclusion, the development of infrastructure, the aspirations of homebuyers for an improved lifestyle, superior project availability, and reliable developers’ presence have collectively driven the surge in home sales in the NCR. This positive market sentiment indicates a promising outlook for the real estate sector and highlights the importance of meeting evolving consumer needs and expectations.
The recent survey conducted by CREDAI, Colliers, and Liases Foras highlights the significant surge in residential prices in various cities across India during the first quarter of 2023. Delhi-NCR, Kolkata, and Bengaluru stood out with remarkable year-on-year increases in residential prices.
Delhi-NCR, comprising areas in and around the national capital, experienced the highest surge in residential prices, with a substantial 16% year-on-year increase. This surge can be attributed to the robust infrastructure development and improved connectivity in the region, making it an attractive destination for homebuyers.
Kolkata, the capital of West Bengal, closely followed Delhi-NCR with a 15% year-on-year increase in residential prices. The city’s real estate market has witnessed positive growth, driven by factors such as infrastructure development, improved transportation networks, and the availability of quality residential projects.
Bengaluru, known as the Silicon Valley of India, also witnessed a significant surge in residential prices, recording a 14% year-on-year increase. The city’s booming IT sector, presence of multinational companies, and favourable business environment have contributed to the growing demand for residential properties, resulting in price appreciation.
It’s worth noting that the survey considers prices based on the carpet area, which provides a more accurate representation of the actual living space. This approach ensures transparency and fairness in assessing residential costs, focusing on the area where occupants reside rather than including common areas or other non-livable spaces.
The surge in residential prices across these cities reflects the growing demand for housing and the overall positive market sentiment. The development of infrastructure, improved connectivity, and the availability of quality residential projects have been instrumental in attracting homebuyers and driving price appreciation.
Homebuyers and investors need to stay informed about market trends and consult with trusted real estate professionals to make well-informed decisions in this dynamic and evolving real estate landscape.
According to industry experts and real estate professionals, the surge in housing prices in India shows no signs of abating, despite the prevailing higher interest rates. The consistent demand observed since the previous year has been a critical factor in increasing prices. However, with interest rates expected to have reached their peak and a pause in the rising repo rate, coupled with a healthy domestic economic outlook, market sentiment is anticipated to remain positive.
Developers are capitalizing on the growing demand by launching new projects across the top eight cities, leading to an upsurge in the overall unsold inventory, a 12% year-on-year increase. It is important to note that a majority of the unsold units, approximately 95%, are still under construction, highlighting the scale of ongoing development activity in these cities.
The rise in housing prices can be attributed to factors such as an increase in construction costs and consumers’ strong inclination towards purchasing new, larger homes with improved amenities. The COVID-19 pandemic has significantly reshaped people’s preferences, emphasizing the desire to own a home rather than rent. Additionally, the moderation in the last two rate hikes by the Reserve Bank of India (RBI) has instilled hope that interest rates may have peaked.
Despite the increase in prices, labour costs, and the preference for larger homes post-pandemic, the Delhi-NCR region has observed a decline in unsold inventory, which industry experts see as highly encouraging. This trend is considered a precursor to future developments, with the expectation of a substantial increase in housing sales. It presents lucrative opportunities for developers to plan new projects in emerging realty hotspots and help buyers realize their housing dreams.
When analyzing the distribution of unsold inventory, the Mumbai Metropolitan Region (MMR) accounted for the largest share at 37%, followed by Pune at 13%. This suggests that while the demand for housing remains strong, some regions may face challenges in managing their existing inventory. It highlights the need for developers and stakeholders to assess the market dynamics and implement effective strategies to address the specific demands and challenges in different regions.
As the real estate market continues to evolve, buyers, developers, and investors need to stay informed about market trends, assess their financial capabilities, and work closely with trusted real estate professionals to make well-informed decisions. The dynamic nature of the real estate sector requires adaptability and a comprehensive understanding of the factors influencing housing prices and market conditions.
