Property values in eight key residential markets across India have strengthened over the past year, driven by an increase in construction costs, according to data from PropTiger.com.
A recent report from PropTiger.com indicates that the average property prices in the majority of the cities examined saw double-digit increases in the third quarter of 2024 (Q3CY2024) when compared to the corresponding period in the previous year. The report, entitled ‘Real Insight Residential: July-September 2024,’ attributes this rise in prices to heightened demand, particularly for premium properties.
“The fact that the Reserve Bank has maintained a status quo on the repo rate at 6.5% in the past 10 policy meetings is adding further pressure on pricing. In the absence of a rate cut, developers as well as buyers continue to pay a comparatively high interest on loans, which ultimately impacts housing affordability,” the report said.
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Delhi-NCR sees the highest annual jump in rates; Hyderabad the lowest
The report underlines a consistent annual growth in property prices for new supply and available inventory across the top eight cities. This sustained growth demonstrates the real estate sector’s resilience and adaptability in the face of evolving market conditions, it said.
According to the report, the highest annual jump in prices was seen in the Delhi-NCR property market, with a staggering 57% increase.
“The rising construction costs have necessitated adjustments to the basic selling price (BSP) of residential units in this market. The combination of strong end-user demand for luxury properties and renewed investor confidence have fueled the upward trajectory of housing prices here,” the report said.
The western cities of Ahmedabad and Mumbai, along with the southern tech hub of Bengaluru, all experienced healthy price appreciation in the 15-21% range whereas Chennai in south and Kolkata in east saw robust growth of 22% compared to the previous year, indicating strong economic activity and housing demand in these metros. This trend points to sustained demand in these economically vital centers.
Pune, often seen as a more affordable alternative to Mumbai, also saw an 18% increase, suggesting it’s maintaining its appeal for homebuyers while still seeing significant price growth.
Hyderabad, known for its IT sector, showed the most modest growth at 7%,
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