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Despite increasing mortgage and housing rates, India’s residential market is predicted to maintain demand pace this year, with sales likely to exceed the demand that was before the pandemic, at a peak of 2.62 lakh units, according to industry stakeholders.
After enduring four consecutive interruptions in the shape of demonetization, RERA, GST, and COVID-19 in the last six years, industry analysts believe the housing market is undergoing fundamental changes and is now at the commencement of a long-term implicit.
The FPCE, a homebuyers’ organization, attributes the better buying sentiment to the Real Estate Regulatory Authority (RERA) established under the Real Estate (Regulation and Development) Act of 2016.
All major publicly traded real estate developers reported record-breaking bookings in the previous fiscal year and have stated that their sales statistics in FY ’23 would be much better.
However, if the entire market is considered, rather than just listed businesses, the RBI’s move to increase the interest rate by a total of 140 basis points, with banks passing on the rise to home loan customers, has slowed sales momentum marginally.
Further reports by real estate players
According to property consultant Anarock, housing sales this year in seven major metropolitan areas — Delhi, Mumbai Cosmopolitan Region, Chennai, Bangalore, Kolkata, Hyderabad, as well as Pune — will exceed the pre-pandemic level of 2,61,358 units, but will miss the mark of the 2014 combined sales of 3.43 lakh units, the strongest growth in the last ten years.
“India’s housing market is at the beginning of a fundamental shift,” Macrotech Developers President and Chief Executive Officer Abhishek Lodha stated, adding that he was optimistic about the forthcoming 10-20 years of expansion.
Better income growth, increased family relevance of housing following COVID-19, and concentration of supply-demand towards respectable developers are among the factors identified by Lodha as driving expansion.
Pirojsha Godrej, Executive Chairman of Godrej Properties, stated that the market has seen the best profitability in the recent two years, with mortgage rates falling to 6.5-7%, while property prices have stayed constant in the prior 7-8 years.
He stated that affordability remains appealing. “It’s been about a year and a half of solid sales for basically everyone.” We just emerged from an 8-9 year down period in the industry.
Pirojsha Godrej has said that “profitability remains much, much better now, despite some price hikes and some improvements in interest rates, than it was during any period in the past twenty years, except maybe the previous year and a half.”
Due to this increase in housing sales, the prominent metropolitan cities in India are witnessing an increase in real estate prices.
Below are the 8 cities where real estate prices are rising:
According to a joint analysis by the real estate group CREDAI and domain specialists Colliers and Liases Foras, home prices have exceeded pre-pandemic levels and are continuing to rise due to increased demand and increasing building material prices.
- Chennai: During the June quarter, Chennai had a 1% rise in real estate values, with a median flooring cost of Rs 7,129 per sq. ft.
- Mumbai: Real estate prices in the Mumbai metropolitan area increased by 1%, to Rs 19,677 every sq. ft. According to the research, MMR still has the biggest proportion of unsold inventory at 36%, and it has had a 14% increase in unsold inventory throughout the previous year.
- Pune: During the preceding quarter, house prices in Pune increased by 5% to Rs 7,681 every sq. ft. Pune experienced a 13 percent increase in unsold inventories.
- Bengaluru: Bengaluru’s real estate prices increased by 4%, with an average flooring cost of Rs 7,848 every sq foot. Conversely, Bengaluru’s inventory backlog fell by the most, by 21 percent year on year.
- Kolkata: Prices for residential property in Kolkata increased by 8% to Rs 6,362 every sq. ft.
- Delhi: In Quarter 2 of 2022, Delhi-NCR had the largest yearly increase in residential costs, with an average flooring cost of Rs 7,434 every sq. ft. The Golf Course Expressway in Dubai recorded the largest price increase of 21% year on year, followed by the Noida Expressway across NCR. Unsold inventory in the Delhi NCR increased by 14%.
- Ahmedabad: During the April-June period, prices for real estate in Ahmedabad increased by 9% year on year to Rs 5,927 for every sq ft.
- Hyderabad: Real estate prices in Hyderabad increased by 8% year on year in the April-June period, reaching Rs 9,218 per sq ft.
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