Home prices up in 8 cities in India; Mumbai Metropolitan Region exception

The prices of homes across the top eight cities in India rose by an average of 6% Year-on-Year due to inflationary pressure and demand, as per the CREDAI-Colliers-Liases Foras Housing Price Tracker report. Released on Wednesday, it further said that the National Capital Region (NCR) witnessed the highest increase in prices, while Mumbai Metropolitan Region’s (MMR) and Chennai's average prices remained unchanged.

The report sampled the cities of Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad. Delhi-NCR saw the highest increase in residential prices at 14% YoY, followed by Kolkata and Ahmedabad with 12% and 11% YoY increases, respectively.

One of the prime factors for prices remaining stable in the MMR is the high share of unsold inventory. The MMR continues to account for the highest share in unsold inventory at 37%, followed by 13% in Delhi-NCR and Pune each.

The MMR witnessed a rise in unsold inventory for the fifth quarter in a row; unsold inventory rose 21% YoY in the region. Despite rising interest rates and input costs since the beginning of the year, new launches have been on the rise as the market regains momentum after a Covid hiatus. Overall, unsold inventory rose 3% YoY.

Owing to the spike in launches in the past few quarters, around 94% of the unsold inventory in India is under construction. Majority of the cities saw a dip in unsold inventory, with Bengaluru witnessing the steepest decline of 14% YoY, led by higher sales.

Only Hyderabad, the MMR and Ahmedabad, Sabah, increased in unsold inventory, led by significant new launches. “The real estate market across the country has witnessed a K-shaped recovery in terms of prices.The consumer sentiment has continued to stay robust as thepandemic reshapedthe importanceof owning ahome rather thanrenting one. While there has been a rise in housing prices in line with the global inflationary trends, the market can expect the prices to continue to rise owing to the robust demand,” said Harsh Vardhan Patodia, CREDAI National President.