Housing prices rise 7% in June quarter

Housing prices across the top eight cities in India increased 7% year-on-year in the June quarter amid robust housing demand backed by continued positive homebuyer sentiment and stable interest rates, according to a report by real estate body CREDAI.

Kolkata recorded the highest increase in residential prices at 15% year-on-year, followed by Delhi NCR and Hyderabad.

Delhi NCR witnessed a 14% year-on-year rise in housing prices during the April-June quarter. At the micro-market level, Golf Course Road and Dwarka Expressway witnessed the highest rise in housing prices at 46% and 40% respectively on a yearly basis. Housing prices in Golf Course Road continue to surpass the prices of Delhi aided by its improving connectivity and proximity to commercial office hubs in Gurugram, which have sparked a surge in demand for residential properties.

Delhi NCR witnessed a drop in unsold inventory levels at 7% YoY, signalling a consistent revival in market fundamentals.

With the increased demand for spacious dwellings, developers continue to launch high-end projects, which pushed housing prices for under-construction units northwards in markets like Kolkata, Hyderabad, Delhi NCR and Bengaluru.

Fuelled by a continued desire for home ownership and stable interest rates, coupled with growth in disposable incomes, housing demand is poised for steady growth even amid unprecedented global economic headwinds, the report says.

"The ongoing momentum in 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," says Boman Irani, President of CREDAI National. The upcoming festive season will further boost sales and sustain the momentum through the start of 2024, Irani says.

Housing prices in Bengaluru surged 10% year-on-year in the June quarter. Housing prices of 3 BHK units surged the highest at 12% year-on-year followed by 2 BHK units owing to the rising demand for mid-segment residential properties.

"Over the last 10 quarters, there has been a consistent upward trend in housing prices across the country. With repo rate stabilising since February 2023 at 6.5%, homebuyers' sentiments remain positive due to greater visibility on monthly EMIs," says Peush Jain, managing director, occupier services, Colliers India.

"While developers continue to grapple with the challenges of higher costs of construction, housing demand remains unwavered. Housing demand is likely to further accelerate in the next few quarters led by the upcoming festive season and continued preference for home ownership," says Jain.