Housing prices in India have surged during the first quarter of 2023 with the average price rise across all the major realty markets being close to 7% YoY. A new report indicated that all the markets covered in the analysis showed an upward movement in average rates of new homes.
According to a recent report by PropTiger.com, the average rate of properties in Bengaluru saw a 10% appreciation in the past one year, making it the market with the sharpest uptrend in property prices. Pune and Ahmedabad were close behind this southern market in terms of price increase, with these markets witnessing an 8% and 7% rise in their average property rates, respectively.
The report also highlighted that the cost of buying a house in India continues to rise due to several factors, including the continuous rise in the cost of raw materials and labour, the growing demand for homes post-COVID, and the cessation of government-funded subsidy schemes in March this year.
Vikas Wadhawan, Group CFO, PropTiger.com, Housing.com & Makaan.com, said, “Real estate has consistently been one of the best-performing asset classes over the long term, and with prices expected to go up further, it might be a good time for fence-sitters to take the jump and buy their dream home.”
“Having said that, one needs to keep in mind that buying a home is the most expensive purchase decision a family typically makes. So, it is important to weigh all the pros and cons carefully before making a final decision,” Wadhawan added.
Furthermore, the report added that while the Reserve Bank of India has taken a pause in hiking rates for now, inflation remains a concern, and the central bank may increase the benchmark lending rate in the next cycle, which could further amplify costs for the buyer because of increased borrowing costs on home loans.
Ankita Sood, head of research, PropTiger.com, Housing.com & Makaan.com, said, “Property prices in Indian cities have been growing at a fast pace of 6-7% since the past year with a renewed thrust on homeownership. Apart from a rise in input costs, limited supply of the right product and ready to move projects for the end-user have led to an upward push in prices.”
Sood added “Interestingly, while the weighted average prices have grown by 6 per cent YoY, in the March quarter, key micro-markets in cities of Gurugram, followed by Bengaluru have seen YoY growth of 13 per cent and 10 per cent, respectively. Given the current market trends of demand-supply mismatch, we expect property prices to continue to rise albeit within a close range, where the quality ready-to-move-in segment will trade at a premium.”
The report indicated that the average price per square foot in cities such as Ahmedabad, Bengaluru, Delhi NCR, Kolkata, and Pune has witnessed a significant increase.
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