A recent CREDAI – Colliers – Liases Foras Housing Price-Tracker Report Q2 2023 reveals that housing prices in India’s top metropolitan areas experienced a substantial year-on-year increase of 7% in the second quarter of 2023. Leading the surge was Kolkata, where housing prices skyrocketed by an impressive 15%. Following closely was Delhi-NCR, witnessing the second-highest rise at 14%, while the Mumbai Metropolitan Region (MMR) saw a contrasting 3% reduction in prices. The surge in demand was attributed to positive sentiment among homebuyers, coupled with stable interest rates.
The study encompassed eight prominent markets: Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, MMR, and Pune. These markets also reported heightened activity in terms of new housing project launches over the past few quarters. Consequently, unsold inventory across India witnessed a 13% year-on-year expansion. Interestingly, Delhi-NCR stood out by recording a 7% drop in unsold inventory levels year-on-year, signaling a consistent revival in market fundamentals. Responding to the increasing demand for spacious residences, developers have been rolling out upscale projects, consequently driving up prices for units under construction across Kolkata, Hyderabad, Delhi-NCR, and Bengaluru.
Unsold Inventory Dynamics
Delhi-NCR stood out as the only city across India to witness a 7% year-on-year drop in unsold inventory, indicating a continued healthy market dynamic. This drop has been consistent over the last two quarters, reflecting a positive consumer sentiment towards buying. In contrast, Ahmedabad and Hyderabad saw a 26% and 24% surge in unsold inventory levels year-on-year, respectively, primarily due to a surge in new project launches.
Kolkata Leads the Price Surge
Kolkata emerged as the frontrunner in the second quarter of 2023, with housing prices recording an exceptional 15% rise, the highest among the top eight cities in India. This upward trajectory has been sustained over the past seven quarters. The recent surge can be attributed to escalating demand, spurred by favorable government incentives including an extended 2% reduction in stamp duty and a prolongation of 10% reduced circle rates until September 2023.
Following closely, Delhi-NCR witnessed a robust 14% year-on-year surge in housing prices during the same period. At a micro-market level, Golf Course Road and Dwarka Expressway experienced the most significant increases, at 46% and 40% respectively, on a year-on-year basis. Notably, housing prices on Golf Course Road surpassed those of Delhi, largely due to improved connectivity and proximity to commercial office hubs in Gurugram. This heightened accessibility has fueled a substantial demand for residential properties in the area.
Other cities experienced varying degrees of price growth. Hyderabad saw a 13% increase, Pune witnessed an 11% uptick, and Bengaluru registered a 10% rise in property prices. In stark contrast, the Mumbai Metropolitan Region (MMR) witnessed a 3% decline, according to the report.
Positive Momentum Continues
The ongoing strong sales momentum across the country is a testament to the positive sentiments of homebuyers and underscores the conducive nature of the market. Despite the rise in prices, this trend is anticipated to persist throughout the fiscal year, owing to a relatively stabilized repo rate and lending environment. The upcoming festive season is also expected to provide an additional boost to sales, sustaining the momentum well into the start of 2024.