Property prices in India’s prime residential markets saw a sharp increase in 2024, with the National Capital Region (NCR) leading the charge with a staggering 49% year-on-year appreciation, according to a new report by PropTiger.com, a leading digital real estate transaction and advisory platform. The surge in property values can be attributed to escalating costs of land, building materials, and labor, coupled with sustained demand for luxury homes.
The report, titled Real Insight: Residential Annual Round-up 2024 by PropTiger.com, revealed that while property prices saw a significant uptick across various cities during the October-December period of 2024, the rise varied by region. In particular, the NCR housing market recorded the sharpest surge in property values, reflecting the region’s growing demand for high-end real estate. This price escalation came despite a general slowdown in price growth in some cities, like Hyderabad, which saw a more modest 3% increase after nearly a decade of strong growth.
Price Growth Across Major Cities
The report highlights property price trends in key residential markets across the country, with Delhi-NCR standing out with the highest increase. The average price per square foot in Delhi NCR rose from ₹5,445 in Q4 2023 to ₹8,105 in Q4 2024, marking a 49% YoY growth. Other major cities also saw impressive growth:
- Ahmedabad: ₹4,000 to ₹4,402 (10% increase)
- Bengaluru: ₹6,744 to ₹7,536 (12% increase)
- Chennai: ₹6,200 to ₹7,173 (16% increase)
- Hyderabad: ₹6,842 to ₹7,053 (3% increase)
- Kolkata: ₹5,100 to ₹5,633 (10% increase)
- Mumbai Metropolitan Region (MMR): ₹10,712 to ₹12,600 (18% increase)
- Pune: ₹6,140 to ₹7,108 (16% increase)
These figures suggest that the demand for residential properties across these cities continues to grow, particularly in areas with strong economic prospects and increasing infrastructural development.
NCR’s Unstoppable Growth
The NCR region’s remarkable surge in property prices can be attributed to several factors, including a thriving economy, high-net-worth individuals (HNIs) making substantial investments, and the growing presence of newly-listed start-ups. Areas like Gurugram, Noida, and Greater Noida saw significant increases in home sales, with Gurugram experiencing a 144% rise in sales YoY. Despite a nationwide dip of 26% in home sales, key NCR cities have maintained strong growth in the residential market.
The report attributes this resilience in NCR’s housing market to developers’ focus on premium housing offerings, a trend driven by the high demand from HNIs and business professionals. Developers are prioritizing luxury properties over affordable housing, thus catering to the growing demand for high-end real estate in the region.
Mumbai and Other Key Markets
Similarly, Mumbai’s residential property market saw an 18% YoY increase in property prices, driven by similar factors of demand from high-net-worth individuals, the presence of Bollywood celebrities, and Mumbai’s status as India’s financial hub. The city continues to be one of the most unaffordable housing markets in the world, attracting significant interest from both domestic and international investors.
Despite strong demand, the rising costs of building materials, land, and labor have made affordability a growing concern. As construction costs continue to climb, affordability issues are expected to deepen, especially for the middle class, which heavily relies on government subsidies for homeownership.
The Need for Policy Measures
Dhruv Agarwala, Group CEO of Housing.com and PropTiger.com, highlighted the challenges posed by the steep rise in property prices, stressing that while this growth indicates strong demand and positive buyer sentiment, it also raises concerns over affordability, particularly for lower-income buyers.
Agarwala suggested that the government must introduce policy measures to address affordability issues, particularly in light of rising inflation and slowing growth. He emphasized that positive changes in tax laws in the upcoming Budget, coupled with potential rate cuts by the Reserve Bank of India (RBI), could help ease affordability challenges for India’s growing middle class.
The PropTiger.com report underscores the need for a balanced approach to the housing market that promotes both luxury and affordable housing to ensure that all segments of society can benefit from the country’s real estate growth.
Conclusion
The 2024 property market performance reflects continued strong demand in India’s key residential markets, with Delhi-NCR and Mumbai leading the surge. However, the rising costs of materials and labor pose a challenge to affordability, urging the government and industry stakeholders to take proactive steps to ensure sustainable growth and accessibility in the housing sector.
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