Residential Property Market Sees 6% Price Increase in Major Cities

According to the latest data from PropTiger.com, a prominent online real estate brokerage company, housing prices in major Indian cities have experienced a year-on-year average appreciation of 6% during the period from April to June this year. This surge in prices can be attributed to robust demand in the market.

PropTiger’s recent report, titled “Real Insight Residential – April-June 2023,” reveals that the weighted average price of residential properties in eight major Indian cities reached Rs 7,000 to 7,200 per square foot during the April-June period, representing a 6% increase compared to the same period last year.

The cities covered in the report include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region, and Pune.

During the April-June period, housing sales in these eight major cities recorded an 8% annual increase, amounting to 80,250 units sold. The rise in sales can be attributed to a surge in demand, particularly in Mumbai and Pune. In the same period of the previous year (April-June 2022), sales stood at 74,320 units in the primary residential markets of these top eight cities.

Analyzing the data, it is revealed that Ahmedabad witnessed a 7% year-on-year increase in prices during the second quarter of 2023, reaching Rs 3,700-3,900 per square foot. Bengaluru experienced a 9% increase, with prices averaging at Rs 6,300-6,500 per square foot. Delhi-NCR observed a 6% growth, reaching Rs 4,800-5,000 per square foot. In the National Capital Region, Gurugram witnessed a significant appreciation of 12%, with prices reaching Rs 7,000-7,200 per square foot. Additionally, Noida in the NCR experienced an 8% rise, with prices reaching Rs 5,600-5,800 per square foot.

Both Mumbai and Pune, which are key property markets in Maharashtra, saw a 3% increase in housing prices. Mumbai’s weighted average price stood at Rs 10,100-10,300 per square foot, while Pune’s rates were at Rs 5,600-5,800 per square foot.

“Housing prices have been on the rise in major Indian cities in the post-COVID years. While this upward trend in capital values is attracting investors to India’s key real estate markets, the increase in new supply is helping to moderate price increases,” stated Vikas Wadhawan, Group CFO of REA India and Business Head at PropTiger.com.

Ankita Sood, Head of Research at REA India, shared insights on Gurugram, stating, “We are witnessing a surge in demand from businesses and large companies in Gurugram. The city continues to dominate in terms of Grade A commercial development, solidifying its position as a top choice for businesses. As a ripple effect, the Gurugram property market has seen good traction for both luxury and mid-segment housing, with a YoY weighted average property price increase of 12% in Q2 2023, surpassing Bengaluru (9%) and Noida (8%). The limited supply has also contributed to the momentum in prices.”

Despite price appreciation and a rise in mortgage rates, housing demand has remained strong. Looking ahead, with home loan interest rates likely to remain stable or even decrease in the coming months, it is expected that housing demand will continue to rise. It is strongly believed that the housing market is currently experiencing a cyclical upturn, according to Wadhawan.

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