Property price trends and forecast for key metro cities in 2018

The real estate industry in India witnessed a period of transformation in 2017. We look at what property seekers can expect in the year ahead, in terms of prices and availability

The real estate sector in India has witnessed significant transformation over the past few years. Policy reforms, like the Real Estate (Regulation and Development) Act (RERA), announcements for affordable housing projects in the annual budgets, incentives under the Pradhan Mantri Awas Yojana (PMAY) scheme and relaxations in the carpet area for affordable housing units, provided a thrust to the overall development of the housing market. While developers struggled with reforms like the RERA and the Goods and Services Tax (GST) in 2017, these reforms are expected to bring transparency in the sector and boost consumer and investors’ confidence, over the long term. In 2018, property prices are expected to be more stable, as projects come under the ambit of RERA, This may also result in timely completion of projects and demand-supply becoming more settled than in the past.

Experts maintain that end-users are likely to prefer ready-to-move-in homes, as against under-construction ones. In some metropolitan cities, developers are using innovative marketing strategies, such as no-EMI periods, buyback schemes and even rent-free accommodation, during the construction phase. Growth in India’s office market, will also have a positive impact on the housing market, across key cities. Demand is likely to be skewed towards cost-effective quality developments by reputed builders.


Property price trends in the top metro cities



Location Price range (Rs per sq ft as on Feb 2018) Change in price per sq ft (-/+ in the last one year)
South Mumbai 60,000 – 1,25,000

(carpet rate)

Mumbai Suburbs 20,000 – 85,000

(carpet rate)

Mumbai Peripheral 7,000 – 19,800

(carpet rate)

Pune (City Level) 12,000 – 16,000 1-2% correction
Gurugram Golf Course Road: 10,000 – 17,000 2-3% correction
Golf Course Extension: 6,500 – 9,000 per sq ft
Dwarka Expressway: 4,500 – 7,000
New Gurugram: 4,000 – 7,000
Noida Greater Noida: 3,000 – 4,500 Stable
Central Noida: 5,500 – 10,000
Kolkata (City Level) Baligunj: 18,000 – 20,000 Stable
Alipur: 14,000 – 22,000
Central 10,000 – 19,000 Stable
East suburbs 4,500 – 9,000 Stable
Southern Peripheral 3,500 – 6,800 1-2% correction
Northern Peripheral 4,500 – 10,000 1-2% correction
CBD 9,000 – 14,000 5-8% increase
Central Suburbs 4,500 – 6,000 Stable
Western Peripherals 5,000 – 7,000 6% increase
Central 16,000 – 3,000 Stable
Off Central 8,000 – 11,000 Stable
Western Suburbs 3,500 – 6,000 Stable
Southern Suburbs 3,000 – 8,000 Stable


Expected triggers that would impact the residential realty market in metro cities in 2018

“With consumers becoming more discerning, ready-to-move-in homes will be the main demand drivers this year, as well. Developers will continue to focus on reducing their present inventory, before launching new projects. The developer’s track record, quality of construction and delivery timelines, will be crucial aspects that home buyers will consider, in their purchase decisions. With RERA in place, the investment environment is also expected to improve. The expected capital inflow would help the segment. Additionally, with the government providing benefits for affordable housing, including setting up of a dedicated fund, we can expect more private developers to get into this segment,” says AS Sivaramakrishnan, head, residential services, India, CBRE South Asia Pvt Ltd.


Expected real estate trends in 2018

A recent report by JLL India pointed out that sales of residential properties have remained strong. While the cumulative new launches across the top seven cities of India (Bengaluru, Chennai, Delhi- NCR, Hyderabad, Kolkata, Mumbai and Pune) in the last two years (2016 and 2017) was recorded at 2,33,387 units, sales of residential units in the same period stood at 2,44,830 units indicating that more apartment units were sold. Ramesh Nair, CEO and country head, JLL India, maintains that this is a good time for end-users, investors and fence-sitters to consider their entry into the residential market. “Prices have been stable for a sustained period. With lending rates from banks having significantly reduced since 2015, to the lowest in a decade, the situation provides residential buyers with an opportune moment to purchase properties, as well as easily service their EMIs,” adds Nair.

According to JLL, as many as 4,40,000 residential units remain unsold across key cities of India, at the end of 2017. Unsold inventory of completed (ready-to-move-in) residential units is estimated at 34,700 units, in the top cities of India. Delhi-NCR accounted for the highest volume of around 1,50,654 unsold units in 2017, while Chennai had the highest percentage of completed unsold inventory at close to 20 per cent. Kolkata had the lowest volume of unsold inventory at approximately 26,000 units.


Unsold real estate inventory in the top cities of India (2017)


City Total unsold inventory


Completed unsold inventory Percentage of completed unsold inventory
Delhi + Faridabad + Ghaziabad and others 37,229 2,427 6.52%
Gurugram 24,410 854 3.50%
Noida and Greater Noida 89,015 5,608 6.30%
Mumbai City 49,067 1,030 2.10%
Thane 12,552 163 1.30%
Navi Mumbai 24,577 2,654 10.80%
Bengaluru 69,877 9,014 12.90%
Chennai 42,594 8,476 19.90%
Hyderabad 28,199 2,369 8.40%
Kolkata 25,951 1,843 7.10%
Pune 36,131 506 1.40%
Total 439,602 34,714 8%

Table as per JLL India Report


The JLL India report further states that owing to the significant volume of unsold inventory, property sellers will keep capital values at buyer friendly rates, across most markets, to ensure sales. Also, with a slowdown in launches, we can expect to see more unsold inventory getting absorbed in the next few quarters. End-users will prefer projects that are closer to completion, which will further accelerate the absorption of unsold units. Capital values will remain stable with a downward bias, making the market favourable for buyers.


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