The average housing prices across India's top eight cities have seen robust growth of 11% on average during the third quarter of 2024, with Delhi-NCR recording a 32% annual increase, while Bengaluru recorded a city-wide surge of 24% year-on-year for the same period, according to the latest CREDAI-Colliers-Liases Foras Housing Price Tracker report.
The uptick reflects sustained demand across residential real estate, fuelled by a combination of favourable lending conditions, infrastructure improvements, and increased activity in premium housing segments.
During the September-ended quarter of the year, the top eight cities recorded an increase of ₹11,000 per square foot in housing prices year-on-year, marking the 15th consecutive quarterly increase in housing prices since 2021.
"We are seeing more and more aspirational homebuyers come to the fore-resulting in bigger homes that are also being reflected in the rise in prices, as homes continue to get more expansive, truly reflecting the current market dynamics and consumer preferences," said Boman Irani, President of CREDAI National.
City-wise Trends
The Delhi-NCR market recorded the highest increase in housing prices, with an average rise of 32% to ₹11,438 per square foot during the third quarter this year, from ₹8,655 per square foot in the same period last year, primarily driven by high demand in Noida and Gurugram areas. Dwarka Expressway and Golf Course Extension/Sohna Road also witnessed significant price appreciation of over 50% year-on-year, the report said.
In Bengaluru, the rates appreciated to ₹11,743 from ₹9,471 per square foot, while the average housing prices in Ahmedabad increased 16% to ₹7,640 from ₹6,613 per square foot year-on-year in the September-ended quarter.
Housing rates increased by 10% to ₹9,890 per square foot in Pune, and the Mumbai Metropolitan Region (MMR) saw a 4% average increase in prices to ₹20,438 per square foot in the third quarter, up from ₹19,585 per square foot in the same period last year. In other cities, including Hyderabad, Chennai, and Kolkata, housing prices increased by 2%-3%, according to the report.
A key factor behind this price surge is the steady demand in luxury and ultra-luxury housing segments. Economic stability, stable interest rates, and infrastructure projects like metro lines and expressways have further boosted buyer confidence, according to the research report. Analysts also point to strong sentiment among developers, who have aligned their supply strategies with demand, especially in urban peripheries where significant infrastructural work is ongoing.
"While the housing market is gradually stabilizing, the outlook for the residential segment remains positive, supported by strong underlying market fundamentals," said Badal Yagnik, Chief Executive Officer, Colliers India.
Despite the positive momentum, the housing sector faces challenges, including a marginal 3% year-on-year increase in unsold inventory to the tune of 10 lakh units across the eight cities. Developers are now focusing on the demand and supply dynamics and reducing new launches in cities that see demand deficits over supply.
The upward trend in housing prices is expected to persist into 2025, supported by an anticipated reduction in benchmark lending rates. This could improve affordability for EMI-dependent buyers. Experts project a further 10%-15% increase in residential prices as developers continue targeting premium and luxury housing segments, where demand remains strong.
