Strong Housing Demand Drives 6% Price Appreciation in Major Indian Cities: PropTiger.com Report

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PropTiger.com Report
PropTiger.com Report

MUMBAI: The residential property market in India experienced an average year-on-year price appreciation of 6% during the April-June period of this year, as per data released by PropTiger.com, the country’s leading online real estate brokerage company. The increase in housing prices can be attributed to strong housing demand.

In the recently released report titled ‘Real Insight Residential – April-June 2023’ by PropTiger.com, a leading digital real estate brokerage company and a part of REA Indiawhich also owns Housing.com & Makaan.com, it was shown that the weighted average price of residential properties across eight major Indian cities reached Rs 7,000-7,200 per square foot during the April-June period. This is a 6% increase compared to the corresponding period in the previous year. The report provides valuable insights into the current state of the real estate market in India’s key cities.

The markets covered in the report include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region, and Pune.

Housing prices have been climbing in major Indian cities in the post-COVID years. While this upward trend in capital values is attracting investors to India’s key real estate markets, the increase in new supply is helping to moderate price increases” said Vikas Wadhawan, Group CFO, REA India & Business Head at PropTiger.com. 

Price Trends:

Price in INR/sqft as of June’23
City Average price Q2-2023 (in Rs per square foot)YoY change Apr-Jun 2023 vs Apr-June 2022 (in %)
Ahmedabad3,700-3,9007%
Bangalore6,300-6,5009%
Chennai5,800-6,0003%
Delhi NCR4,800-5,0006%
Gurugram7,000-7,20012%
Noida5,600-5,8008%
Hyderabad6,400-6,6005%
Kolkata4,600-4,8006%
Mumbai10,100-10,3003%
Pune5,600-5,8003%
Pan India7,000-7,2006%
*Weighted average prices as per new supply and inventory as of June 2023

While talking about specific market trends, Ankita Sood, Head of Research, REA India (PropTiger.com, Housing.com & Makaan.com) said,We are witnessing a surge in demand from business and large companies in Gurugram. The city continues to dominate in terms of Grade A commercial development, solidifying its position as a top choice for business. As a ripple effect, the Gurugram property market has seen good traction for both luxury and mid-segment housing. Gurugram saw a YoY weighted average property price increase of 12% in Q2 2023, surpassing Bengaluru (9%) and Noida (8%).”

Ms. Sood further elaborated,Surge in demand is driven by consumers seeking improved amenities and an enhanced lifestyle, migrating from conventional property formats in Delhi and neighboring areas. Additionally, the limited supply has also contributed to the momentum in prices.

According to the data, Ahmedabad experienced a 7% year-on-year increase in prices during the second quarter of 2023, reaching Rs 3,700-3,900 per square foot. Bengaluru witnessed a 9% increase, with prices averaging at Rs 6,300-6,500 per square foot.

In Chennai, prices rose by 3% to Rs 5,800-6,000 per square foot. Delhi-NCR observed a 6% growth to Rs 4,800-5,000 per square foot. Meanwhile, Gurugram in the national capital region saw a 12% appreciation, with prices reaching Rs 7,000-7,200 per square foot, and Noida experienced an 8% rise to Rs 5,600-5,800 per square foot.

Hyderabad registered a 5% increase, with prices averaging at Rs 6,400-6,600 per square foot. Kolkata reported a 6% rise, with prices reaching Rs 4,600-4,800 per square foot.

In Mumbai and Pune, both key property markets in Maharashtra, housing prices increased by 3% each. Mumbai’s weighted average price stood at Rs 10,100-10,300 per square foot, while Pune’s rates were at Rs 5,600-5,800 per square foot.

“Despite both an appreciation in prices and a rise in mortgage rates, housing demand has remained strong. Going forward, with interest rates on home loans likely to remain stable or even soften in the coming months, we expect housing demand to rise. We strongly believe that the housing market is in the midst of a cyclical upturn, added Mr. Wadhawan.

During the April-June period, housing sales across the eight major cities experienced an 8% annual increase, to 80,250 units. The growth in sales can be attributed to increased demand, especially in Mumbai and Pune. In the same period last year (Apr-June 2022), sales stood at 74,320 units in the primary residential markets of the top eight cities.

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