Home prices in India surged 8%, Delhi-NCR experiencing steepest increase at 16% YoY

Home prices in India surged 8% during January-March period of 2023, with Delhi-National Capital Region (NCR) experiencing the steepest increase of 16%, driven by robust housing demand and a wave of quality launches by top developers, according to a price tracker report prepared jointly by Credai, Colliers and Liases Foras. “Housing prices across the top eight cities in India increased 8% YoY (in Q1 2023) amidst strong housing demand and consistent quality launches by top developers. Delhi-NCR saw the highest increase in residential prices at 16% YoY, followed by Kolkata and Bengaluru with 15% and 14% YoY increase respectively," the report said.

Despite rising interest rates, housing prices have been on the rise led by consistent demand seen since last year. As the interest rates are now expected to have peaked, a pause in the rising repo rate paired with healthy domestic economic outlook will keep the market sentiment upbeat, it added. Boman Irani, president, Confederation of

Real Estate Developers‘ Associations of India (Credai), said, “Owing to a conducive buying eco-system, homebuyers’ sentiment has been quite positive for the past few quarters. This is also validated by the sheer volume of sales that we have been witnessing in the recent past, especially in tier 1 cities across India."

Developers in the top eight cities responded to the increasing demand by launching new projects, leading to a 12% YoY rise in unsold inventory. Hyderabad experienced the highest surge in unsold inventory, with levels jumping by 38% YoY. However, Delhi-NCR, Bengaluru, and Chennai observed a decline in unsold inventory due to a significant increase in sales. The Mumbai Metropolitan Region (MMR) accounted for the largest share of unsold inventory at 37%, followed by Pune at 13%.

Peush Jain, managing director of Occupier Services at Colliers India, noted that the residential real estate market in India has rebounded strongly after the pandemic, supported by the preference for home ownership, relative affordability, and the availability of quality supply. Despite the 250-basis point increase in the Reserve Bank of India’s (RBI) repo rate since May 2022, Jain highlighted that the sector remained resilient, indicating a promising outlook for residential real estate in 2023.

According to the report, Delhi-NCR has witnessed a steady rise in housing prices over the past eleven quarters. Notably, Dwarka Expressway recorded a significant price increase of 59% YoY, primarily driven by the opening of Central Peripheral Road and the loop connecting Dwarka Expressway with NH-8. Golf Course Road also experienced a surge of 42% YoY, surpassing the housing prices of Delhi micro market. The region saw a 38% drop in unsold inventory compared to pre-pandemic levels, demonstrating positive consumer sentiment.

Hyderabad saw a notable surge in unsold inventory, increasing by 38% YoY, attributed to new project launches in the Northwest and Southwest regions of the city. However, housing prices in Hyderabad have consistently risen over the past nine quarters, registering a 13% YoY surge during Q1 2023.

The housing market in Mumbai Metropolitan Region remained relatively stable during Q1 2023. Peripheral micro markets, such as Panvel and the western suburbs, witnessed increases of 9% and 6.4% YoY, respectively. MMR continued to have the highest share of unsold units among major cities in India, driven by new project launches. Pankaj Kapoor, managing director of Liases Foras, projected continued growth in sales and supply in major Indian cities throughout the fiscal year 2023. Kapoor emphasized that the price rise would likely be moderate, maintaining a balance in the market