Mumbai outperformed Bengaluru and Delhi on the list of global prime cities index with an increase in average annual prices in Q1 2023, a report by real estate consulting firm Knight Frank said.
The report, Prime Global Cities Index (PGCI) Q1 2023, said that Mumbai moved up from the 38th rank in Q1 2022 to sixth the quarter based on the annual growth in high-end or prime properties.|
Bengaluru and Delhi also witnessed an upward movement in ranking to 16th and 22nd spots from their previous 37th and 39th ranks, respectively, in Q1 2022.
The rise in average prices in Mumbai was recorded at 5.5 percent year-on-year (YoY), while it was 3 percent YoY in Bengaluru and 1.2 percent YoY in New Delhi, over Q1 2022, the report said.
The PGCI is a valuation-based index tracking the movement of prime residential prices across 46 cities worldwide. The index tracks nominal prices in local currency.
"The Indian economy stood out with steady performance despite concerns around global growth and inflation that marked most of 2022. However, the Indian real estate markets displayed continued momentum in demand, amid concerns of an inflationary environment, and weathered a steep rise in home loan rates over the past 12 months," said Shishir Baijal, chairman and managing director, Knight Frank India.
Marginal decline globally
The global prime cities index witnessed a marginal annual decline, the report added.
"The Index fell by 0.4 percent in the 12 months to the end of March this year, the first fall since 2009. This marks a sharp reversal from a peak of 10.1 percent growth in the fourth quarter of 2021," the report said.
Dubai clinched the top position globally with an increase of 44.2 percent in prime residential property values, it said.
Dubai’s 149 percent growth through the pandemic (March 2020 to date) reflects a market undergoing significant structural change, according to the report. Miami saw the second strongest growth over the same period, but at only 59 percent paled before Dubai’s exceptional market transformation.
Future outlook
The report added that while the US Federal Reserve and other central banks may be closing in on peak rates, it is likely that even prime housing markets may experience continued downward pressure on prices for the next few quarters.
"It is unlikely we will see a correction similar in scale to that seen during the Global Financial Crisis when the overall PGCI index fell 8.2 percent from peak to trough in 2009," the report said.
Early signs indicate that while some markets saw improvements, 46 percent of markets saw quarterly prices fall through the second half of 2022, but only 28 percent saw a decline in the first quarter of this year, the lowest number since the first quarter of 2021, the report concluded
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