A resurgence in residential demand and an increase in construction material costs has led to a 5% increase in housing prices across the top eight cities of Delhi-NCR, Mumbai, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad, in the April-June quarter, with the national capital region witnessing the highest increase at 10%, according to a new report.
The report by realtors' industry body Credai, real estate consultant Colliers India and data analytic firm Liases Foras, added that residential prices, which have surpassed pre-pandemic levels, have been seeing an upward trend led by rising demand amidst increasing prices of construction materials.
Delhi-NCR saw the highest increase in residential prices at 10% year-on-year with an average carpet price of ₹7,434/sq feet, followed by Ahmedabad (9% increase to ₹5,927/sq feet), Hyderabad (8% increase to ₹9,218/sq feet), Kolkata (8% increase to ₹6,362/sq feet), Pune (5% increase to ₹7,681/sq feet), Bengaluru (4% increase to ₹7,848/sq feet), Chennai (1% increase to ₹7,129/sq feet) and Mumbai Metropolitan Region (MMR) (1% increase to ₹19,677/sq feet).
“The sales momentum that started in the latter part of last year continued in Q2 2022 as well, led by pent-up demand and attractive pricing. Hence, despite rising prices and an increase in new launches in the last few quarters, unsold inventory saw a dip in the majority of the cities,” the report noted.
Bengaluru witnessed the steepest decline of 21% YoY in its inventory overhang, led by higher sales. Only Hyderabad, MMR and Ahmedabad saw an increase in unsold inventory, which was led by significant new launches. MMR still accounts for the highest share in unsold inventory at 36%, followed by 14% in Delhi-NCR and 13% in Pune.
“The central bank continues to increase repo rates to offset the impact of inflation and banks are expected to increase loan interest rates including that of home loans. As captured in this report, the housing prices have increased between 2 – 5% across cities, as materials and labour costs continue to remain high. We may see a marginal dip in demand due to increasing interest rates, but I am confident that the sales will continue to grow across segments from September, as we enter the festive season,” Harsh Vardhan Patodia, President of CREDAI National said.
