Indian Housing Market Stays Strong, Prices Climb 3% in Q2: CREDAI-Colliers-Liases Fora

Gurugram / August 26, 2024: Positive homebuyer sentiment and steady demand have kept the momentum strong in residential market across major Indian cities. Average housing prices across the top eight Indian cities witnessed a 3% QoQ growth in Q2 2024, CREDAI-Colliers-Liases Fora said in a report. 

Interestingly, quarterly price movements at India level have been almost similar at about 3% for the last four quarters. This stability in price growth is reflective of steady underlying demand over the last few quarters. On an annual basis too, average housing prices at the end of Q2 2024 have showed a 12% growth across the eight major cities. Interestingly, 7 out of 8 cities under review witnessed annual price appreciation, with Delhi NCR witnessing the highest price rise at 30% YoY closely followed by Bengaluru, the report added. 

While unsold inventory remained stable on an annual basis at a pan India level, it dropped marginally on a quarterly basis amid healthy sales in housing units. At 5%, Kolkata saw the highest sequential decline in unsold inventory levels followed by Pune with 3% dip. As of Q2 2024, there was an availability of over 10 lakh housing units across the primary market of eight major cities, with MMR alone having about 40% share in unsold inventory levels. Despite yearly increase in number of unsold units in Hyderabad and Bengaluru, both cities saw a modest dip on a sequential basis. As the festive season approaches, developers are likely to closely monitor new launches and overall housing stock in prominent residential catchment areas.

Boman Irani, President of CREDAI National, stated, “Indian Real Estate has been somewhat experiencing a bull run in the past few quarters, substantiated by the volume of transactions across Top 8 cities as well as the prevalent positive sentiments towards housing. There has been a direct impact on housing prices – signifying not just the underlying demand but the definitive shift towards real estate as a preferred asset class. With the upcoming festive season – coupled with the Government’s focus on infrastructure and a relatively stable lending eco-system – we project this momentum to be further have an impact on both prices and unsold inventory levels, as the industry’s demand-supply dynamics change.”

Badal Yagnik, Chief Executive Officer, Colliers, India, stated, “Housing demand has continued to remain healthy over the past few quarters. Concurrently, stable interest rates and recent positive budgetary announcements, have provided tailwinds for the housing market of the country. Notably, average housing prices have witnessed a consistent double-digit annual growth rate (12% in Q2 2024,) adding buoyancy to the sustained growth story in residential real estate. Additionally, the upcoming festive season will further invigorate the housing market with heightened sales and new launches. We thus envisage a strong finish for the housing market in 2024.”

Pan India residential price trends (Q2 2024) (in INR/sq ft)

All the prices are based on carpet area

*NCR- National Capital Region

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**MMR- Mumbai Metropolitan Region

Pankaj Kapoor, Managing Director, Liases Foras, said, “Sales across India’s cities have maintained growth despite the price rise. The current quarter also showed a remarkable 33% increase in new launches in the affordable segment. NCR’s growth in sales and new launches augurs that the market will stay on a growth trajectory.” 

Delhi NCR Sees a 16% QoQ Rise in Housing Prices 

At 16%, average housing prices in Delhi NCR witnessed the highest quarterly price appreciation. Within Delhi NCR, Dwarka Expressway and Greater Noida witnessed impressive price appreciation at 35% and 24% QoQ in average housing prices respectively. This is the highest quarterly price rise for these micro markets in last few quarters and is led by the recent pick up in luxury segment launches. Furthermore, preference for spacious housing units in luxury & ultra-luxury segments led up-to 12% QoQ growth in average price of 3-4BHK configurations in Delhi NCR.

Bengaluru too witnessed significant price appreciation, with average housing prices in the city breaching the INR 11,000 mark in Q2 2024. Average residential prices in the city increased by 8% on a quarterly basis. Within Bengaluru, Inner East micro market saw the highest quarterly rise at 25% followed by Periphery & Outer East micro market at 10%. Additionally, led by heightened demand in luxury segment, Inner East and Periphery & Outer West micro markets, have witnessed significant surge in average housing prices for ready units.

Unsold Inventory Declines on a Quarterly Basis in 7 out of the 8 Cities

Excluding MMR, unsold inventory levels have declined by up to 5% on a quarterly basis across all cities under review. While MMR witnessed healthy sales in residential units during Q2 2024, significant surge in new launches led to a marginal rise in unsold units. On an annual basis with a 13% YoY drop, Pune particularly witnessed the highest annual decline in unsold units. Annual decline in unsold inventory levels have been significant in Ahmedabad, Chennai and Kolkata too with 6-8% drop.

Vimal Nadar, Senior Director and Head of Research, Colliers India, stated, “Within the residential market, demand growth has been the strongest in luxury & ultra-luxury segments including second & vacation homes which is evident with price growth in select micro-markets of Delhi NCR and Bengaluru. Average housing prices for spacious dwelling units, particularly 3-4BHK configurations in these cities have increased up-to 30% on an annual basis. Additionally, the government’s recent partial rollback pertaining to long term capital gains arising out of sale of land and buildings retrospectively is expected to boost investors and homeowners’ sentiment and thus, the real estate sector at large.” 

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