August 9, 2023: Housing prices across India’s eight cities increased 7% year-on-year (YoY) amid robust housing demand backed by continued positive homebuyer sentiment and stable interest rates, shows a new report.
Released jointly by industry body Credai and real estate brokerage giants Colliers & Liases Foras, the report titled the Housing Price-Tracker Report Q2 2023, says Kolkata recorded the highest increase in residential prices at 15% YoY, followed by the Delhi-National Capital Region (NCR) and Hyderabad with 14% and 13% annual increase, respectively.
“Fueled 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,” says the report.
Unsold inventory swells 13% YoY
In tandem with sales, top markets have also seen heightened activity in new launches in the past few quarters. As a result, unsold inventory expanded by 13% YoY pan-India. However, Delhi-NCR witnessed a dip in unsold inventory levels at 7% YoY, signaling a consistent revival in market fundamentals. With increased demand for spacious dwellings, developers continue to launch high-end projects, which has pushed housing prices for under-construction units northwards in markets like Kolkata, Hyderabad, Delhi NCR and Bangalore.
“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%, 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 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 Peush Jain, managing director, occupier services, Colliers India.
Pan-India residential prices Q2 2023 (in Rs per square foot)
| City | Average Price Q2 2023 | QoQ Change | YoY Change | |
| Ahmedabad | 6,507 | 3% | 10% | |
| Bangalore | 8,688 | -1% | 10% | |
| Chennai | 7,653 | 3% | 6% | |
| Delhi NCR | 8,652 | 3% | 14% | |
| Hyderabad | 10,530 | 1% | 13% | |
| Kolkata | 7,315 | 1% | 15% | |
| MMR | 19,111 | -1% | -3% | |
| Pune | 8,540 | 2% | 11% | |
Source: Liases Foras, Colliers
Prices are based on carpet area
“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-19. 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,” says Credai national president Boman Irani.
Highest housing price rise in Kolkata at 15% YoY
In Q22023, housing prices in Kolkata witnessed a 15% YoY rise, 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 in housing prices is owing to the rising demand boosted by positive government incentives such as extension of 2% reduction in stamp duty and extension of 10% reduced circle rates till September 2023.
Delhi-NCR witnessed a 14% YoY rise in housing prices during Q2 2023. At the micro-market level, the Golf Course Road and the Dwarka Expressway witnessed the highest rise in housing prices at 46% and 40%, respectively, on an annual basis. Housing prices along the Golf Course Road continue to surpass the prices of Delhi in Q22023, attributed to its improving connectivity and proximity to commercial office hubs in Gurgaon, which have sparked a surge in demand for residential properties.
“Factors like improved infrastructure, enhanced connectivity, rising disposable income, and government incentives have fueled housing demand across Indian cities. While most cities saw double-digit price increases during Q2 2023, Delhi-NCR is consistently seeing an uptick in housing prices for the past 12 quarters. Notably, the newly developed Dwarka Expressway and the upcoming 50 km 6-lane highway are expected to further drive demand in Gurgaon, Ghaziabad and Noida. Amid other major cities, prominent micro-markets in MMR saw a price rise of 3-5% YoY,” said Vimal Nadar, senior director and head of research, Colliers India.
Delhi-NCR only market to witness a drop
Unsold inventory in Delhi-NCR dropped 7% YoY, resulting to be the only city in 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, signaling positive consumer buying sentiment. On the other hand, led by a spurt in new project launches, particularly in the northwest suburb in Ahmedabad and southwest micro-market in Hyderabad, the two cities saw a surge in unsold inventory levels in by 26% and 24% respectively on YoY basis. Despite increase in unsold inventory, housing prices in both the cities have consistently shown a rise over the past few quarters.
Housing prices in Bangalore rise 10% YoY
Housing prices in Bangalore surged 10% YoY during Q2 2023, with prices in the periphery and outer west micro-markets witnessing the highest rise of 42% YoY, led by upcoming high-end projects. Housing prices of 3BHK units surged the highest at 12% YoY followed by 2BHK units, owing to the rising demand for mid-segment residential properties.
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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