Housing prices rise about 20% in two years; Bengaluru witnesses highest price rise of 31%

A new report by CREDAI – Colliers - Liases Foras has revealed that the housing prices across metro cities in India has grown approximately 20% from 2021 to 2023.

Home sales from 2021 to 2023

Cities Bengaluru, Delhi NCR, and Kolkata have witnessed the highest rise in average housing prices at about 30% in 2023 compared to 2021 levels. In particular the mid and luxury segments have seen an uptick in demand. The CREDAI – Colliers - Liases Foras report further mentioned that developers were able to successfully pass on the rising cost of construction in most cases due to significant new launches.

“The year-on-year increase in housing prices is a combination of a number of factors – characterized by strong, robust demand from homebuyers – especially for mid and premium segments, along with the existence of a conducive buying eco-system coupled with healthy macro-economic factors, and the rise in prices of construction materials. The ongoing momentum also encouraged numerous developers that has led to the increase in housing supply across major cities in India. We expect both – housing demand and supply – to thrust forward in 2024 not only in top 8 cities but in Tier II, III regions as well”, stated Mr. Boman Irani, President of CREDAI National.

Also Read: Mumbai leads with 40% surge in housing sales; top-7 cities sell 4.7 lakh units: Report

India's Silicon Valley Bengaluru noted a significant 31% increase in housing prices during 2021- 2023. A noticeable uptick in demand for residential properties near IT localities like Whitefield, KR Puram, and Sarjapur has lead to a consistent house price rise over the past 2 years.

Additionally the report further mentioned that the city saw an average 2X rise in new launches in 2023, compared to 2021, with significant surge in luxury and ultra-luxury property launches in peripheral areas within the North and East sub-markets, as they emerge as prominent IT hubs.

The most expensive residential market in India Mumbai Metropolitan Region saw a modest yet steady 2% increase in the average housing prices during 2023 compared to 2021 levels.

Housing Prices in Q3 FY24

Meanwhile, amidst the unwavering homebuyers confidence which is aided by a favourable interest rate cycle and positive economic outlook the prices, the All-India Home Price Index (HPI) of the RBI jumped to 3.81% in the December quarter of 2023-24 from the year-ago period.

During the corresponding quarter last year, the annual growth in the index was 2.81% and in the July-September quarter of 2023-24, the annual price rise of houses had moderated to 3.5%.

The HPI data is released based on transaction-level data received from the registration authorities in 10 major cities on February 26, 2024. The cities include Ahmedabad, Delhi NCR, Mumbai Metropolitan Region, Bengaluru, Chennai, Kolkatta, Kochi, Jaipur, Kanpur and Lucknow.

As per RBI, Delhi, Mumbai, Chennai, Bengaluru, Ahmedabad and Kochi — recorded a rise in house prices during the latest quarter. Chennai has witnessed the maximum price rise recording 8.41% Y-O-Y increase in Q32024.

Kolkata came second with a 7.65% year-on-year rise during the December quarter. The home price index of Bengaluru surged to 6.34% in the quarter under review. The home price index improved to 5.10% in Ahmedabad.

Meanwhile, Delhi's and Mumbai's HPI growth decelerated in the third quarter of 2024. In Delhi it moderated to 1.13% in the December quarter from 4.63% in the previous quarter while Mumbai's housing price index dropped to 2.02% in Q32024 from 2.35% in Q22024.

At 0.64%, Kochi saw the lowest annual growth in the home price index among the 10 cities.