A recent joint report by CREDAI, Colliers India, and Liases Foras reveals significant growth in India’s housing market during the October-December quarter of 2024. The report shows that housing prices across eight major cities have risen by an average of 10% year-over-year, with Delhi-NCR leading the way with an impressive 31% increase. This surge is driven by strong demand, rising input costs, and positive market sentiment, reflecting a dynamic shift in India’s real estate landscape.
Key Highlights from the Report
Overall Price Appreciation
- 10% Average Increase:
Across the top eight cities in India, housing prices have increased by an average of 10% during the last quarter of 2024. This robust growth is attributed to sustained demand and higher input costs in construction. - Strong Demand:
The surge in prices is fueled by a healthy demand for residential properties, especially as buyers seek larger homes and upgraded amenities in the post-pandemic era.
Delhi-NCR: The Market Leader
- 31% Annual Growth:
Among the eight cities, Delhi-NCR recorded the highest annual appreciation at 31%. This significant rise highlights the region’s attractiveness due to its business opportunities, improved infrastructure, and lifestyle enhancements. - Price Benchmark:
The average housing price in Delhi-NCR reached ₹11,993 per sq ft (carpet area), setting a high benchmark for growth and investment potential in the region.
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City-Wise Breakdown of Housing Price Growth
Ahmedabad
- Growth: 15% YoY Increase
- Average Price: ₹7,725 per sq ft
- Highlights:
Rapid urban renewal and infrastructural development have contributed to a steady rise in property values, making Ahmedabad a promising market for investors.
Bengaluru
- Growth: 23% YoY Increase
- Average Price: ₹12,238 per sq ft
- Highlights:
As the tech capital of India, Bengaluru continues to see strong demand, particularly in areas that attract IT professionals and expatriates.
Chennai
- Growth: 6% YoY Increase
- Average Price: ₹8,141 per sq ft
- Highlights:
Chennai’s stable market and affordable cost of living, combined with continuous urban development, contribute to moderate yet steady price appreciation.
Hyderabad
- Growth: 2% YoY Increase
- Average Price: ₹11,351 per sq ft
- Highlights:
Despite being an emerging tech hub, Hyderabad’s growth in housing prices has been more subdued, reflecting its competitive market dynamics and varying demand across regions.
Kolkata
- Growth: 1% YoY Increase
- Average Price: ₹7,971 per sq ft
- Highlights:
Kolkata’s market remains relatively affordable, attracting first-time homebuyers, even as the city gradually modernizes its urban infrastructure.
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Mumbai Metropolitan Region (MMR)
- Growth: 3% YoY Increase
- Average Price: ₹20,725 per sq ft
- Highlights:
Despite high entry costs, MMR continues to be a hotspot for real estate investments, driven by limited land availability and consistent demand for luxury properties.
Pune
- Growth: 9% YoY Increase
- Average Price: ₹9,982 per sq ft
- Highlights:
Pune’s expanding IT and education sectors, combined with significant infrastructure upgrades like metro projects, have made it a preferred destination for real estate investors.
Declining Unsold Inventory
Another positive indicator from the report is the decline in unsold housing inventory. The overall unsold inventory in India dropped by 5% during Q4 2024, reaching below 10 lakh housing units—the lowest level in the past two years. Notably:
- MMR’s Share: Approximately 40% of the unsold inventory remains in the Mumbai Metropolitan Region.
- Pune and Hyderabad: Pune saw the highest annual decline in unsold inventory at 14%, closely followed by Hyderabad at 13%.
This reduction in inventory not only reflects strong demand but also indicates that buyers are becoming more decisive, further boosting market sentiment.
Expert Insights and Future Outlook
1. Market Confidence
Boman Irani, President of CREDAI National, stated that the sustained growth in housing prices underscores the strong confidence among homebuyers. The trend reflects a preference for larger homes, better amenities, and upgraded lifestyles in the post-pandemic era.
2. Affordable Housing and Lending Environment
Badal Yagnik, CEO of Colliers India, highlighted that the recent repo rate cut and government initiatives to fund stressed residential projects will bolster the affordable housing segment. As the lending environment improves, more buyers are likely to secure home loans, stimulating further growth in the real estate market.
3. Shift in Market Composition
Pankaj Kapoor, Managing Director of Liases Foras, mentioned that while sales witnessed a marginal decline due to a slowdown in new launches, the affordable and mid-segment housing supply is expected to grow. This shift will change the market composition, which has been skewed towards the luxury segment in recent years.
Conclusion
The latest report on housing prices in India highlights a robust 10% average YoY growth across eight major cities in the last quarter of 2024, with Delhi-NCR leading the pack at an impressive 31% annual increase. This surge, driven by strong demand and higher input costs, underscores the dynamic nature of India’s real estate market. For investors and homebuyers alike, these figures not only signal healthy market momentum but also provide valuable insights into where to focus future investments.
As the market evolves, regional differences in growth such as the rapid appreciation in Delhi-NCR and Bengaluru versus more modest gains in cities like Hyderabad and Kolkata offer diverse opportunities for tailored investment strategies. With declining unsold inventory and supportive lending conditions, the overall outlook for Indian real estate remains positive.
Staying informed about these trends and understanding the factors driving price appreciation is essential for making sound investment decisions. Whether you’re looking to invest in luxury or affordable housing, the current market dynamics suggest that the time is ripe to explore opportunities across India’s top property markets. Happy investing!
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Ans 1. The report shows that housing prices in eight major Indian cities have increased by an average of 10% year-over-year, with Delhi-NCR experiencing a remarkable 31% surge.
Ans 2. Delhi-NCR recorded the highest growth at 31%, making it the leading market in terms of price appreciation among the cities analyzed.
Ans 3. Strong demand for larger homes, improved infrastructure, and rising input costs have driven the significant increase in property prices in Delhi-NCR.
Ans 4. While Delhi-NCR saw a 31% increase, the other seven major cities reported an average annual growth of 10%, reflecting steady market dynamics.
Ans 5. A 5% decline in unsold housing inventory indicates strong buyer confidence and reduced market saturation, signaling a robust real estate market.
Ans 6. Pune saw a 14% decline, and Hyderabad experienced a 13% drop in unsold inventory, reflecting high demand and efficient market absorption.
Ans 7. Increased property values enhance the potential for long-term capital gains, making real estate investments more attractive for both homebuyers and seasoned investors.
Ans 8. Ongoing infrastructure projects, such as metro expansions and urban renewal initiatives, boost connectivity and elevate property values across these cities.