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.

Also Read: IT Hubs see Up to 31% Housing Rental Values Growth among Top 7 Cities in 9M 2023 

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Gold remained a favourite investment for Indian households due to its liquidity and investment size flexibility. Equities are highly volatile and easily impacted by social, political, and economic upheavals. Real estate, always considered a long-term investment, gives portfolio stability, and appreciates with time. The physical nature of the asset, unlike stocks, also ensures limited wealth erosion.

The Bear of the 1st Wave of Pandemic

As the COVID-19 pandemic beset the world towards the end of 2019, global stock markets buckled and crumbled under unprecedented business uncertainties. India, an integral part of the global economy, also saw rough times – the BSE Sensex declined sharply by 29% between December 2019 and March 2020.

Gold, considered a ‘safe haven’ investment in time of turbulence, went northward and appreciated by 4%. Residential real estate prices in India remained stable as there were uncertainties about the execution, development, and sales of the projects. All sectors, including real estate, were challenged on how to navigate the tempest.

The Lethal 2nd Wave (April 2021 – June 2021)

The 2nd wave was more toxic in India, creating an acute healthcare crisis that claimed many lives and led to the re-enforcement of lockdowns. However, all asset classes stayed steady on the back of business continuity learnings from the 1st wave.

The stock markets exhibited resilience and investors again became active as many scrips were available at attractive valuations. During this period, the Sensex regained a growth trajectory after a minor correction of 1% in April 2021 compared to the previous month. Gold, though lower than the previous peak, appreciated again, while residential real estate remained stable.

The Post Pandemic Recovery (September 2020 till date)

The Sensex has recorded the highest appreciation in value and volume since the pandemic receded. The 3rd wave early this year caused a minor aberration and was short-lived. Gold continued regaining lost ground and would have remained in a stronger position had it not been for the global economic turmoil, geopolitical tensions, and supply chain issues.

Prashant Thakur, Sr. Director & Head – Research, ANAROCK Group, says, “In all this turmoil, residential real estate has exhibited exceptional resilience and is now on a growth path. The weighted average price across the top seven cities has appreciated. While price is a function of supply and demand, the favourable change of sales exceeding supply continued even during the pandemic. Analysis shows that the available housing inventory is on a steady decline.”

Performance Over Pre-Pandemic Levels

Source: ANAROCK Research. Data for the top 7 cities of India only.

Source: ANAROCK Research

(Prices are for BSP on SBUA. Data for the top 7 cities of India only)

Source: Compiled by ANAROCK Research

All assets have exceeded their pre-pandemic levels. Compared to the September 2019 levels, the BSE Sensex has recorded an appreciation of 52%, gold prices have increased by 34%, and residential real estate by 9%. These readings indicate that the worst impact of the pandemic is behind us. Economic growth, despite global uncertainties and the headwind of rising inflation, is likely to be robust.

“The COVID-19 pandemic reaffirmed the necessity of owning homes, since it provides more than mere accommodation – it also gives security in times of generalized financial instability,” says Prashant Thakur. “Gold and stocks, on the other hand, are volatile and subject to market risks.”

Currently, real estate activities are in full swing and both demand and supply are increasing rapidly. As residential launches increased by 76% and sales by 61% in H1 2022 compared to the pre-pandemic levels of H2 2019, housing is all set to witness further traction during the festive season, leading to further price appreciation.

Also Read: RBI Monetary Policy – Can the Housing Market Absorb Another Hike?

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