Mumbai records 3rd highest property price rise globally in Q1 2024: Report

June 14: 2024: Mumbai and New Delhi recorded an increase in their average annual property prices while Bangalore witnessed a slight drop in prime residential or luxury homes in Q1 2024, as noted by Knight Frank’s recent report ‘Prime Global Cities Index Q1 2024’. Mumbai’s significant rise on the international index was largely due to the rise in demand in the city. While the demand has been strong for all segments, we have seen a rise in the sale of higher value products. 

Mumbai recorded the third highest year-on-year (YoY) growth in prime residential prices in Q1 2024, pushing it up the ranking table by three places to third position from its sixth position in Q1 2023. NCR rose from 17th rank in Q1 2023 to fifth in Q1 2024 with a growth of 10.5% YoY. However, Bangalore observed a decline in ranking from 16th place in Q1 2024 to 17th rank in Q1 2024, even while it recorded a 4.8% YoY growth in residential prices.  

India’s main cities, notably New Delhi and Mumbai, have witnessed a surge in house prices driven by robust economic growth, as indicated by our findings, with annual GDP growth exceeding 8%.

The rise in global prime residential price index was recorded at 4.1% across the 44 markets in the 12-month period ending March 2024, wherein the prices are rising at their fastest rate since Q3 2022.

Shishir Baijal, chairman and managing director at Knight Frank India, said, “The strong demand trend for residential properties has been a global phenomenon, led by gateway markets of Asia- Pacific and EMEA. Like its peers in these regions, the improved rankings of Mumbai and New Delhi on the Prime Global Cities Index was underscored by the resilience in sales growth volume. We expect the momentum of sales to remain stable over the next few quarters as the economic conditions are likely to remain broadly unchanged.” 

Manila claimed the top spot in the ranking with a 26.2% annual rise in prices which was the highest in the ranking this quarter. This remarkable growth can be attributed to two key factors: a robust economic performance enhancing consumer confidence and purchasing power, and substantial infrastructure investments within and around the city, which have further stimulated demand. 

Tokyo jumped 17 places up with 12.5% YoY growth and ranks second in the index. The significant rise in house prices at the beginning of 2024 can be credited to two primary factors: exceptionally advantageous mortgage terms provided by Japanese banks and a depreciation of the yen, leading to heightened foreign investment in Tokyo’s real estate market. Despite Japan’s overall population decline, Tokyo sustains a net population growth owing to migration from other regions within the country.

Liam Bailey, Knight Frank’s Global Head of Research, said “The rebound in global housing markets is continuing, as evidenced by our Prime Global Cities Index reaching 4.1% annual growth. Rather than heralding a return to boom conditions, the index indicates that upwards price pressures are stemming from relatively healthy demand, set against continued low supply volumes. The pivot in rates – when it comes – will encourage more vendors into the market, leading to a welcome return to liquidity in key global markets.”