Housing prices increase 7% in top metros in Q2 2023; Kolkata sees highest 15% jump: Report

Housing prices across the top eight cities in India increased 7 percent year on year (YoY)

Housing prices across the top eight cities in India increased 7 percent year on year (YoY) on robust housing demand backed by continued positive homebuyer sentiment and stable interest rates.

Kolkata recorded the highest 15 percent YoY increase in residential prices, followed by Delhi-NCR and Hyderabad with 14 percent and 13 percent YoY increase respectively, said a CREDAI – Colliers - Liases Foras Housing Price-Tracker Report Q2 2023

The eight markets included Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, MMR and Pune.

These markets also saw heightened activity in new launches in the past few quarters. As a result, unsold inventory expanded by 13 percent YoY pan India. Delhi-NCR witnessed a drop in unsold inventory levels at 7 percent YoY, signalling a consistent revival in market fundamentals. With an increased demand for spacious dwellings, developers continue to launch high-end projects, which pushed up prices for under-construction units in markets including Kolkata, Hyderabad, Delhi-NCR and Bengaluru.

Kolkata posts highest price rise 

In Q2 2023, overall housing prices in Kolkata witnessed a 15 percent YoY rise, the highest across the top eight cities in India. Housing prices in the city have been on the rise over the past seven quarters. The recent surge is owing to the rising demand boosted by positive government incentives such as an extension of a 2 percent reduction in stamp duty and an extension of 10 percent reduced circle rates till September 2023.

Just a few paces behind Kolkata, Delhi- NCR witnessed a 14 percent YoY rise in housing prices during Q2 2023. At the micro-market level, Golf Course Road and Dwarka Expressway witnessed the highest rise in housing prices at 46 percent and 40 percent, respectively, on a YoY basis. Housing prices in Golf Course Road continue to surpass the prices of Delhi in Q2 2023 attributed to its improving connectivity and proximity to commercial office hubs in Gurugram, which have sparked a surge in demand for residential properties.

Hyderabad saw prices increase by 13 percent; Pune witnessed an 11 percent increase in property prices and Bengaluru 10 percent but Mumbai Metropolitan Region (MMR) saw prices reduce by 3 percent, the report said.

“The ongoing momentum in the quantum of sales across the country is a clear reflection of positive homebuyer sentiments and validates the conducive nature of the market. We’re also witnessing record-breaking numbers due to the pent-up demand from Covid and despite the price rise, we expect this trend to continue for the rest of the fiscal year – on the back of a relatively stabilised repo rate and lending eco-system. Additionally, the upcoming festive season will help in further boosting the sales and sustain the momentum through the start of 2024,” said Boman Irani, President of CREDAI National.

Unsold inventory drops in Delhi-NCR

The unsold inventory in Delhi-NCR dropped 7 percent YoY, the only city pan India to witness a drop, indicating continued healthy market dynamics. Unsold inventory in Delhi-NCR has been witnessing a drop for the last two quarters, signalling positive consumer buying sentiment. On the other hand, led by a spurt in new project launches, particularly in the Northwest suburb in Ahmedabad and the Southwest micro market in Hyderabad, the two cities saw unsold inventory levels surge by 26 percent and 24 percent, respectively on a YoY basis. Despite the increase in unsold inventory, housing prices in both cities have consistently shown a rise over the past few quarters.

“Over the last 10 quarters, there has been a consistent upward trend in housing prices across the country. With the repo rate stabilising since February 2023 at 6.5 percent, homebuyers’ sentiments remain positive due to greater visibility on monthly EMIs. While developers continue to grapple with the challenges of higher costs of construction, housing demand remains unwavering. Housing demand is likely to further accelerate in the next few quarters led by the upcoming festive season and continued preference for home ownership,” said Peush Jain, Managing Director, Occupier Services, Colliers India.