The Indian housing market continues to defy expectations, with property prices in major cities like Delhi-NCR and Bengaluru jumping by an impressive 29% year-on-year in the July-September quarter of 2024, according to real estate consultant Anarock. This sharp increase is driven by a combination of robust demand, rising input costs, and a growing supply of premium and luxury homes. This blog will take a deep dive into what’s driving these price hikes, the challenges in the market, and how other key cities across India are performing.
Housing Price Surge: An In-depth Look:
Anarock’s latest data reveals that average residential property prices in Delhi-NCR rose to ₹7,200 per square foot in Q3 2024, up from ₹5,570 per square foot during the same period last year. Similarly, Bengaluru witnessed prices climb to ₹8,100 per square foot from ₹6,275 per square foot—a substantial 29% increase.
This price surge is not limited to just these two cities. Other metropolitan regions, such as Hyderabad, Mumbai, and Pune, have also seen notable price increases, with Hyderabad leading the pack with a 32% rise in prices.
Key Takeaways:
Delhi-NCR: Prices rose 29% to ₹7,200 per sq ft.
Bengaluru: Prices increased 29% to ₹8,100 per sq ft.
Hyderabad: Witnessed a 32% jump to ₹7,150 per sq ft, the highest across India.
Mumbai Metropolitan Region (MMR): Prices surged by 24% to ₹16,300 per sq ft.
Pune and Chennai: Both saw a 16% price hike to ₹7,600 and ₹6,680 per sq ft, respectively.
Factors Driving the Price Hike:
High Demand for Premium Properties: The rising demand for luxury homes and high-end properties has played a crucial role in driving up prices. Cities like Bengaluru and Delhi-NCR are seeing an increase in the supply of premium properties, which has pushed the overall median price of housing.
Rising Input Costs: The cost of construction materials, labor, and land acquisition has been on the rise, adding to the overall increase in property prices. This is a key factor contributing to the price hike across multiple cities.
Economic and Infrastructure Growth: Cities like Delhi-NCR and Bengaluru are experiencing rapid infrastructure development, particularly around key areas like Dwarka Expressway and the upcoming Bengaluru suburban rail network. These developments are adding to the appeal of these areas for real estate investors.
Supply-Demand Imbalance: Although demand remains high, new housing supply has fallen by 19% across the top 7 cities, according to Anarock. This reduction in supply is creating a demand-supply imbalance, further pushing up prices.
Expert Insights:
Darshan Govindaraju, Director of Bengaluru-based Vaishnavi Group, mentions, “The rise in housing prices is a continuation of the trend seen in previous quarters, largely driven by increased input costs and the growing share of premium properties in the market.”
Angad Bedi, CMD of BCD Group, attributes this growth to factors such as improved infrastructure, strong economic activity, and a rising demand for luxury homes. However, he also warns that continued price increases could affect affordability, especially for middle-income buyers.
Market Outlook: Will Prices Stabilize?
Despite the recent surge, industry experts believe that housing prices may start to stabilize in the coming quarters. Anarock Chairman Anuj Puri noted that while the market remains strong, the growth seen in recent years may not continue at the same pace.
With the festive season (October-December) approaching, developers are expected to roll out discounts and offers to attract more buyers. However, the market is likely to stabilize with more balanced growth in housing sales and price hikes.
Conclusion:
The 29% surge in housing prices in Delhi-NCR and Bengaluru Housing Prices Growth is a clear indicator of a strong, albeit increasingly expensive, real estate market. While rising input costs and growing demand for premium homes continue to drive prices upward, experts caution that continued price inflation may affect long-term affordability.
As the festive quarter approaches, buyers and investors should keep an eye on upcoming offers from developers, while being mindful of the possibility of price stabilization in the near future.
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