Housing prices continue to head northwards at 10% YoY in Q3 2023

Housing prices across the top eight^[1] cities in India increased incessantly at 10% YoY during Q3 2023 led by steady & sturdy housing demand amid positive home buyer sentiment and stable interest rates. All eight major cities experienced a notable increase in housing prices, with Hyderabad leading the pack at 19% YoY rise, closely followed by Bengaluru at 18% on an annual basis. The housing market is likely to further firm up by the end of 2023, driven by likely strong momentum during the festive season fueled by positive market synergies in the form of attractive incentives, lucrative schemes for the homebuyers, and new launches in an already upbeat market.

Boman Irani, President of CREDAI National stated, “Homebuyer sentiments have been quite positive in 2023, playing a huge factor in not just the volume of housing registrations, but also indirectly having a cascading impact on increasing housing prices. On the back of a stabilized economy, job security, stable lending environment, we project this sales momentum to continue, with sustainable development and Green housing expected to lead the next growth phase in the industry. Developers have also been at the forefront to ensure that it remains a conducive buying environment, facilitating enhanced transparency and providing financial incentives that added to the overall appeal of purchasing homes.”

Alongside increasing sales, the top housing markets of Bengaluru, Hyderabad, Delhi NCR, and MMR saw a surge in new property launches, with a notable emphasis on the mid and luxury segments. The mid-segment accounted for the largest share of unsold units at 32%, closely trailed by the affordable segment. However, there was a 1% quarterly drop in unsold inventory, led by favorable market dynamics as of end of September 2023. With increased demand for spacious dwellings, developers continued to launch high-end projects, which pushed housing prices for under-construction units northward in markets like Kolkata, Hyderabad, Delhi NCR, and Bengaluru.

“The strong 10% annual increase in housing prices across India’s top eight cities during the third quarter of 2023 signifies a competitive and flourishing housing market. Fueled by strong homebuyer sentiments and positive market fundamentals, Hyderabad and Bengaluru witnessed the highest price rise at 18-19% YoY during the quarter. Tracing the strong streak of sales momentum with industry consensus, sales estimates already reaching closer to 2022 levels, 2023 is expected to close stronger than 2022. Furthermore, developers are increasingly targeting sustainable projects, with homebuyers’ inclination towards eco-friendly living, affirming a green future for the country,” Badal Yagnik, Chief Executive Officer, Colliers, India   

“Last year, the housing market grew by 35%. The sales in the first nine months of the current year grew further by 11% from the previous year. With a 10% increase in the prices, the housing market is at its most productive phase in India; sales, new supply, and prices are witnessing healthy growth”, said Pankaj Kapoor, Managing Director, Liases Foras”. 

Pan India residential prices Q3 2023 (in INR/sq ft) –

Source: Liases Foras, Colliers

All the prices are based on carpet area

^[1] Top eight cities include- Ahmedabad, Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, MMR, and Pune

Hyderabad witnessed the highest price rise at 19% YoY during Q3 2023

Hyderabad emerged as the frontrunner with a 19% YoY upswing in housing prices, marking the highest surge among the top eight cities in India. Central Hyderabad, being an established sub-market, recently witnessed new property launches at a market premium, resulting in a notable surge in overall property prices. Moreover, the imminent development of Metro Phase 2 and the Airport metro line promises to further elevate the city’s residential landscape, connecting major office hubs to the airport, and is set to catalyze future residential developments.

“In Q3 2023, housing prices in Bengaluru’s residential market surged 18% YoY, largely led by the Periphery and Outer East region where housing prices rose 39% annually, driven by high-end & luxury project launches and completion of KR Puram & Whitefield metro lines. The city is emerging as a new luxury destination and several established developers are actively exploring to tap on this growing segment and cater to diverse preferences & demand dynamics. Whitefield, Sarjapur Road, and HSR Layout are likely to be the preferred localities for such high-end and luxury developments,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

Strong demand continues to pull unsold inventory down in Delhi NCR

The unsold inventory in Delhi NCR dropped 7% YoY, indicating a steady momentum in sales in this region. Interestingly, the dip in unsold stock has been seen for the third consecutive quarter this year, reflecting improving market fundamentals.

Housing prices in MMR rose marginally in Q3 2023

The average housing prices in MMR recorded a notable 2% surge on a sequential basis during the quarter ended September 2023. Navi Mumbai sub-market stood out, with the highest YoY price rise at an impressive 11% in the region. At the same time, the region saw a substantial surge in new launches, especially in suburban and peripheral sub-markets such as Western and Central Suburbs.

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