Where Indian Housing Prices Have Risen Most Sharply
A recent poll conducted by Reuters among 16 property market experts suggests that house prices in India will rise by 7.8 percent in the current year, almost double the increase for 2023. According to the experts surveyed, this is mostly driven by increasing demand for luxury residential real estate, while the spiking demand for more affordable housing is generally not forecast to be satisfied due to lower profit margins for real estate developers. Zooming in on the eight biggest cities and metropolitan areas, significant increases in house prices are exhibited in all but two areas.
This is evident in the most recent Housing Price Tracker by the Indian real estate trade association CREDAI, published in conjunction with Colliers and Liases Foras. The tracker shows that in Bengaluru, Hyderabad and the National Capital Region (NCR), a multi-state metropolitan area encompassing the country's capital Delhi as well as other cities like Faridabad and Gurugram, average house prices have risen by upwards of 50 percent in the second quarter of 2024 compared to the period of January to March 2019.
On the other side of the spectrum, prices in the Mumbai Metropolitan Region were on the same level as five years prior. However, this doesn't mean that prices were constant in the past quarters, but rather that the devaluation of housing stopped. For example, in the second quarter of 2023 average house prices in Mumbai stood five percent lower than in Q1 2019.
Looking at the year-over-year development, Delhi and the NCR saw the highest increase in house prices, rising 30 percent from the second quarter of 2023, largely driven by luxury real estate projects. The NCR is followed by Bengaluru (28 percent year-over-year change), Ahmedabad (13 percent year-over-year change) and Pune (13 percent year-over-year change), with the rest of the top 8 cities and metropolitan regions staying significantly below the ten percent threshold.