Housing Prices Rise In Top Indian Cities, Delhi Sees Highest Spike

Housing prices in Indian cities rose during the January-March period due to new launches and sales across major Indian cities in India despite higher mortgage rates.

Prices across top eight cities increased 8% year-on-year, according to Colliers-Liases Foras' Housing Price-Tracker Report for Q1 2023.

The price rise comes amid strong housing demand and new launches by top developers. Despite rising interest rates, demand in residential sector remained healthy. Thus, housing prices continued to head northwards, the report said.

All eight cities, except the Mumbai Metropolitan Region, saw an increase in housing prices, with the National Capital Region witnessing the highest increase at 16% YoY. It was closely followed by Kolkata and Bengaluru with 15% and 14% increase respectively.

The top eight cities continued to witness a rise in new launches, as developers planned to tap the rising demand.

“Despite a 250-basis point increase in the RBI's repo rate since May 2022, the residential sector in India remained resilient through 2022 and in Q1 2023. The resultant increase in home loan interest rates, did not defer demand, as the momentum of sales continued unabated,” said Vimal Nadar, senior director and head of research, Colliers International (India) Property Services Pvt.

City Trends

Housing prices in Delhi-NCR has seen a steady rise since the last eleven quarters. Notably, Dwarka Expressway witnessed a significant price rise at 59% YoY, largely led by opening of the Central Peripheral Road and the loop connecting Dwarka expressway with NH-8. Housing prices in Golf Course Road also surged 42% YoY.

While the overall housing prices in Bengaluru increased 14% YoY during the period, Inner North region saw a drop in prices at 13% YoY, due to limited demand, as per the data by Colliers-Liases Foras.

Housing prices in MMR largely remained stable, during Q1 2023. At the same time, peripheral micro markets like Panvel witnessed a 9% increase on YoY basis, followed by western suburbs at 6.4%. The region continued to account for the highest share in unsold units among the major cities in India.

“FY23 witnessed the highest-ever new launches and sales across major Indian cities in India. The trends will likely continue, the sale and supply will likely grow, and the price rise will be moderate,” Pankaj Kapoor, managing director, Liases Foras Real Estate Rating & Research Ltd., said in the report.