These two Indian cities are among top 5 APAC residential markets in terms of annual price growth

Mumbai and Bengaluru have found a spot among top five best performing Asia-Pacific (APAC) residential markets in terms of annual price growth in H2 2022, according to a report from Knight Frank. The international property consultancy has launched its latest report 'Asia-Pacific Residential Review Index' for the second half of 2022 (H2 CY22)

According to the review index, 14 out of 23 APAC cities have recorded positive annual price growth. Metro Manila ranked as the best-performing Asia-Pacific market with 24 per cent year-on-year (YoY) growth, said the index.

Both Mumbai and Bengaluru have been placed at fourth position in the index report, registering a price growth of 7 per cent YoY in the given period. India's national capital Delhi, another key residential market, is also among the top-10 best performing APAC markets with price growth of 6.8 per cent YoY in H2CY22.

The report suggest that residential markets of Bengaluru, Mumbai and Delhi are expected to moderately Xx in the next one year, despite the recent policy rate hikes by the Reserve Bank of India (RBI). The central bank announced to increase the repo rate by 25 basis points to 6.5 per cent on February 8, 2022.

Bengaluru’s residential prices are expected to grow in the range of 3-5 per cent, whereas residential prices of Mumbai and Delhi may see a growth of up to 4 per cent and 3 per cent, respectively.

"Despite the Reserve Bank of India raising policy rates by a cumulative 225 bps in 2022, residential demand in the country has not only remained resilient but surged to a nine year high in terms of annual sales in 2022," said Shishir Baijal, Chairman & Managing Director, Knight Frank India

Despite the further 25 bps hike by RBI in February 2023, India’s inherent economic strength and healthy affordability levels will be the prime factors that will support the residential market in the next 12 months, he said.

Although Asia-Pacific markets persist in having a cautious outlook due to increasing interest rates, high mortgage rates, and high inflation, most remain stable and optimistic due to the Chinese Mainland ending its Zero-covid strategy and the near full re-opening of the economy post-pandemic.

“Annualized home values in the APAC region’s residential sector rose noticeably slower in 2022, decelerating to 0.4 per cent from 5.7 per cent six months ago, as more homebuyers are priced out by the rise in mortgage rates and an inflationary environment sparks caution, said Victoria Garrett, Head of Residential at Knight Frank Asia-Pacific.
 

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