Mumbai: Positive homebuyer sentiment and steady demand have kept the momentum strong in the residential market across major Indian cities. Average housing prices across the top eight Indian cities witnessed a 3% quarter-on-quarter (QoQ) growth in Q2 2024. Interestingly, quarterly price movements at India level have been almost similar at about 3% for the last four quarters.
This has been revealed in the Housing Price-Tracker Report for the second quarter published by CREDAI, Colliers and Liases Foras. The stability in price growth is reflective of steady underlying demand over the last few quarters. On an annual basis too, average housing prices at the end of Q2 2024 have shown a 12% growth across the eight major cities.
Seven out of eight cities under review witnessed annual price appreciation, with Delhi NCR witnessing the highest price rise at 30% year-on-year (YoY) closely followed by Bengaluru. While unsold inventory remained stable on an annual basis at a pan India level, it dropped marginally on a quarterly basis amid healthy sales in housing units. At 5%, Kolkata saw the highest sequential decline in unsold inventory levels followed by Pune with 3% dip.
As of Q2 2024, there was an availability of over 10 lakh housing units across the primary market of eight major cities, with Mumbai Metropolitan Region (MMR) alone having about 40% share in unsold inventory levels. Despite a yearly increase in the number of unsold units in Hyderabad and Bengaluru, both cities saw a modest dip on a sequential basis. As the festive season approaches, developers are likely to closely monitor new launches and overall housing stock in prominent residential catchment areas.
President of CREDAI National, Boman Irani stated, “Indian Real Estate has been somewhat experiencing a bull run in the past few quarters, substantiated by the volume of transactions across top 8 cities as well as the prevalent positive sentiments towards housing. There has been a direct impact on housing prices - signifying not just the underlying demand but the definitive shift towards real estate as a preferred asset class. With the upcoming festive season - coupled with the Government’s focus on infrastructure and a relatively stable lending eco-system - we project this momentum to further have an impact on both prices and unsold inventory levels, as the industry's demand-supply dynamics change.
" "Housing demand has continued to remain healthy over the past few quarters. Concurrently, stable interest rates and recent positive budgetary announcements, have provided tailwinds for the housing market of the country. Notably, average housing prices have witnessed a consistent double-digit annual growth rate (12% in Q2 2024,) adding buoyancy to the sustained growth story in residential real estate.
Additionally, the upcoming festive season will further invigorate the housing market with heightened sales and new launches. We thus envisage a strong finish for the housing market in 2024,” added the Chief Executive Officer of Colliers, India, Badal Yagnik. Managing Director of Liases Foras, Pankaj Kapoor said, “Sales across India's cities have maintained growth despite the price rise.
The current quarter also showed a remarkable 33% increase in new launches in the affordable segment. NCR's growth in sales and new launches augurs that the market will stay on a growth trajectory.” Excluding MMR, unsold inventory levels have declined by up to 5% on a quarterly basis across all cities under review.
While MMR witnessed healthy sales in residential units during Q2 2024, significant surge in new launches led to a marginal rise in unsold units. On an annual basis with a 13% YoY drop, Pune particularly witnessed the highest annual decline in unsold units. Annual decline in unsold inventory levels have been significant in Ahmedabad, Chennai and Kolkata too with 6-8% drop.
“Within the residential market, demand growth has been the strongest in luxury & ultra-luxury segments including second and vacation homes which is evident with price growth in select micro-markets of Delhi NCR and Bengaluru. Average housing prices for spacious dwelling units, particularly 3-4BHK configurations in these cities have increased up-to 30% on an annual basis. Additionally, the government’s recent partial rollback pertaining to long term capital gains arising out of sale of land and buildings retrospectively is expected to boost investors and homeowners’ sentiment and thus, the real estate sector at large,” said Senior Director and Head of Research, Colliers India, Vimal Nadar.
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