Which Indian Realty Markets Have Seen 10% Price Increment?
Which Indian realty markets have experienced a 10% price increment?
The real estate market in India had a dynamic first quarter in 2024. It saw significant price hikes and changes in unsold inventory in major cities. This period highlighted the sector's resilience amidst evolving economic conditions and consumer preferences.
Price Trends Across the Top Seven Cities
Housing prices in India were up by 10% in Q1 2024. Demand for homes drove the rise. Bengaluru was the frontrunner, with a significant 19% surge in housing prices.
Delhi NCR was close behind, with prices rising by 16% in sub-regions such as Gurugram and Noida. Ahmedabad and Pune also saw significant growth. This highlights strong markets and investor confidence.
In specific terms, Ahmedabad and Pune saw a 13% price hike. Prices reached ?7,176 per square foot in Ahmedabad and 9,448 in Pune. Hyderabad's price rose 9% to ?11,323 per square foot. Chennai saw a 4% increase to 7,710 per square foot.
Mumbai Metropolitan Region (MMR) observed a 6% uptick, reaching 20,361 per square foot. Kolkata followed with a 7% rise to 7,727 per square foot.
Unsold Inventory Dynamics
Prices were up. But, unsold inventory varied by city. As of Q1 2024, the total unsold inventory across the top eight cities stood close to 10 lakh units. The Mumbai Metropolitan Region (MMR) accounted for nearly 40% of this inventory.
It was a significant share. Pune led with a considerable 10% decrease in unsold inventory. Delhi NCR and Ahmedabad followed, each with an 8% drop.
However, Hyderabad and Bengaluru saw yearly increases in unsold inventory. But, they also saw a slight quarterly decline. Demand and supply forces achieve a balance.
Factors Driving Price Increase
The rise in home prices is due to many factors, including high home demand. Stable lending practices and a conducive economic environment have supported buyer confidence. Also, big projects in new micro-markets have boosted property values. This is especially true in the premium and luxury segments.
Industry Insights and Expert Opinions
Experts from Colliers and Liebourn Foras have provided valuable insights into the market dynamics of Q1 2024. They highlight that the housing market benefited from good feelings and activity.
The demand for luxury and ultra-luxury housing remains strong. Affluent homebuyers and strategic property launches drive it. Boman Irani is the President of CREDAI National. He says, "Rising housing prices are due to strong demand that we are seeing."
The demand is very high. It is high in luxury housing, by buyers across the country." These links contribute to a stable lending ecosystem. They are also linked to the rise of micro-markets, which have benefited from big infrastructure projects.
Market Dynamics and Future Outlook
Looking ahead, the market for homes in India will continue to grow. Demand across various segments will support this growth. Developers should focus on launching upscale projects. These will cater to the rising demand for luxury and ultra-luxury housing.
Glimpse Of Commercial Real Estate Market
The sector is resilient and adaptable to changing economies, demonstrating its potential as a critical driver of growth and investor interest. In Q1 2024, Delhi NCR and Bengaluru led India's commercial real estate.
They made up about 47% of the leasing. Delhi NCR led the gross leasing market with a share of 26.6%, followed by Bengaluru at 20.4%. Chennai maintained a strong performance with a notable 17.6% share.
Mumbai and Pune had gross leasing figures of 2.11 million sq ft and 1.81 million sq ft. Delhi NCR also led in net absorption, accounting for 28.2% of the total, where most contribution was made by Noida and Gurugram, followed by Bengaluru at 21.2% and Mumbai at 18.8%.
The rise in net absorption shows growing demand. It marks a post-COVID high for Delhi NCR, Mumbai, Hyderabad, and Chennai. However, the supply of new office spaces was at a 15-quarter low, declining by 55.8% from the previous quarter.
Hyderabad led new completions with a 25.1% share, followed by Delhi NCR and Mumbai. Nationwide vacancy rates dropped to 17.1%. Strong demand for top-quality institutional assets in critical markets drove this.
Conclusion
In conclusion, Q1 2024 was vital for the Indian housing and commercial market. Significant price increases and changes in unsold inventory have been seen.
The sector's performance reflects its strength. It has stayed strong during economic fluctuations. It also shows the importance of strategic investments and infrastructure in shaping markets.
Demand is vital in the premium and luxury segments. The outlook for Indian residential real estate remains optimistic.
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