Despite global economic challenges, housing demand remains strong across the country, price rise notwithstanding; in fact, it is set to steadily increase.
By Nichola Marie
The mood is undeniably buoyant in the real estate sector. Reports reveal that residential property rates in the eight leading urban centres of India increased by 7% year-on-year. This growth is believed to be driven by strong deman+d for housing along with continued favourable attitudes among homebuyers and consistent interest rates. Interestingly, the report by Colliers, CREDAI and Liases Foras also shows that Kolkata registered the highest growth in the compared period.
Despite global economic challenges, housing demand remains strong in spite of the price rise; in fact, it is set to steadily expand. Pent-up demand from the Covid pandemic, relatively stabilised repo rate and lending ecosystem, consistent aspiration for owning homes, and an increase in disposable incomes are believed to be behind this sustained growth. The sector is being further transformed by trends such as virtual visits, improved accessibility, growth in Tier 2 and Tier 3 cities, sustainable spaces, and rise in flexible offices.
Luxury housing segment sales are also surging, as people opt for larger spaces with mod-cons, including dedicated rooms for working from home. Sales of luxury housing priced at ₹4 crore and above jumped 97% year-on-year during January–September 2023. The trend is expected to continue especially among non-resident Indians and millennials with high disposable incomes.
Housing prices for under-construction properties have seen a rise in cities such as Kolkata, Hyderabad, Delhi NCR, and Bengaluru. This is driven by the growing demand for larger living spaces, with developers, in turn, launching upscale projects in these cities.
Experts believe the housing market has maintained its prudence and discipline mainly due to a large number of new launches over the last year. Increasing supply has helped keep the price rise moderate and productive, attracting the end-user, as well as, long-term investors. Sales are further expected to continue to grow.
Kolkata: Transitioning from its traditional housing patterns, Kolkata is embracing contemporary trends. The city registered the highest increase in residential prices among the eight cities – a whopping 15% y-o-y in the April-June quarter of 2023. Housing prices in Kolkata have been on the rise over the past seven quarters. However, the recent spike in housing prices is believed to be due to rising demand further boosted by positive government incentives such as extension of 2% reduction in stamp duty and extension of 10% reduced circle rate. The neighbourhoods of New Town, Rajarhat, and Joka have emerged as frontrunners in residential sales
Delhi-NCR: This region came second as housing prices in the northern region rose by 14% y-o-y in Q2. At the micro-market level, Golf Course Road at 46% and Dwarka Expressway at 40% witnessed the highest rise in housing prices. Housing prices at Golf Course Road continue to surpass the prices of Delhi in Q2 2023 due to improving connectivity and proximity to commercial office hubs in Gurugram. This has sparked a surge in demand for residential properties here. Delhi NCR has consistently seen an uptick in housing prices for the past 12 quarters. Notably, the newly developed Dwarka Expressway and the upcoming 50-km, 6-lane highway in Delhi-NCR are expected to further drive demand in Gurugram, Ghaziabad and Noida.
Chennai: Chennai’s infrastructure saw significant improvements in the first half of 2023, which are set to redefine the real estate landscape. In the first half of 2023, homebuyers displayed a preference for larger homes, driven by factors like work-from-home arrangements and the need for more space. Trends suggest a preference for practical facilities, such as gyms, jogging tracks, and play areas, as opposed to squash courts and swimming pools. The proposed increase in FSI to 6.5 in certain locations will transform Chennai into a vertical city. Key regions experiencing a surge in demand include North Chennai, Porur, Gudavancheri, and Parandur
Mumbai Metropolitan Region: India’s financial capital witnessed a surge in registration numbers and revenue collection. In August, 10,990 properties were registered in Mumbai, leading to a revenue collection of over ₹ 810 crore. Incidentally, in the same month last year, 8,552 properties were registered bringing in a revenue of ₹643 crore. While a majority of property sales occurred in the Western suburbs, the Southern part of the city, too, has been witnessing considerable demand in 2023. Localities like Malad and Kandivali top in terms of housing demand; and other areas including Andheri West, Jogeshwari, Borivali-Dahisar, and Mira Road are swiftly picking up pace. Thane has also emerged as one of the most affordable property sales cities. The boom is evidently the outcome of increased proximity to commercial hubs, affordable property rates, and enhanced connectivity with newlylaunched metro lines like 2A and 7. Infrastructural developments like the metro Aqua Line 3 and Mumbai Trans Harbour Link, deemed to be the longest sea bridge in India, further indicate a promising future.
Bengaluru: The city witnessed a surge of 10% y-o-y in housing prices during Q2 2023. Driven by upcoming high-end projects, micro markets in the periphery and outer west registered the highest price rise of 42%. The prices of 3 BHK units increased the most at 12% y-o-y, followed by 2 BHK units owing to the rising demand for mid-segment residential properties.