Housing Prices Witness 6% Rise In Q3 2022 Amidst Demand Surge During Festive Season: Credai

Amidst robust demand for housing and new launches by well-known developers, housing prices in India's top eight cities (Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad) have increased by 6 per cent year-on-year (YoY).

Since the beginning of 2022, housing prices have been on the rise on the back of increased demand seen since last year, paired with a rise in input prices. Delhi-NCR saw the highest increase in residential prices at 14 per cent YoY, followed by Kolkata and Ahmedabad with 12 per cent and 11 per cent YoY increases, respectively.

New launches have been on the rise since the beginning of the year as the market regains momentum after a hiatus, despite rising interest rates and input costs since the beginning of the year. Overall[1], unsold inventory rose 3 per cent YoY. Owing to the spike in launches in the past few quarters, around 94 per cent of the unsold inventory in India are under construction.
 
 The majority of the cities saw a dip in unsold inventory, with Bengaluru witnessing the steepest decline of 14 per cent YoY, led by higher sales. Only Hyderabad, MMR and Ahmedabad saw an increase in unsold inventory, led by significant new launches. MMR continues to account for the highest share in unsold inventory at 37%, followed by 13% in Delhi- NCR and Pune each.

Harsh Vardhan Patodia, President of CREDAI National stated, “The Real Estate market across the country has witnessed a K-shaped recovery in terms of prices, the consumer sentiment has continued to stay robust as the pandemic reshaped the importance of owning a home rather than renting one. With the festive period expected to continue till the end of this year, we can expect sales to be northbound and the number of unsold inventories to decline as well. While there has been a rise in housing prices in line with the global inflationary trends, the market can expect the prices to continue to rise owing to the robust demand. The industry has embarked towards solidity after a let-up due to the pandemic and should be able to stabilize in H1 of 2023”.

“After uncertainty in the past two years, 2022 has ushered in relative stability and recovery for the residential market across top eight cities. The rise in inflation and hike in input costs have put upward pressure on housing prices pan India. Several developers have launched projects and offered rebates during the festive period. While residential activities continue to remain strong, recessionary pressures may have an impact on the salaried class, who form a notable share in homebuying in the top Indian cities,” said Ramesh Nair, Chief Executive Officer | India & Managing Director, Market Development | Asia, Colliers.

“The aggregated sales of three-quarters of CY22 are 16% higher than the aggregate similar three quatres sales of CY 21. Despite increasing interest rates and marginal property prices, there is still a parity between the prices and affordability; sales volumes are likely to stay strong. The year 2022 is slated to pose the highest ever sales in the residential market in India, said Pankaj Kapoor, Managing Director, Liases Foras”. 

Delhi-NCR continues to witness highest price appreciation during Q3 2022, at 14% YoY 

Housing prices in Delhi-NCR have witnessed an uptick since September 2020. Delhi NCR saw the highest increase in housing prices across pan India at 14 per cent YoY. Golf Course Road saw the highest price rise of 21 per cent, followed by Ghaziabad. The unsold inventory in the city dropped by 11% YoY during Q3 2022. 

Unsold inventory rose 21% YoY in MMR region, while housing prices continue to remain stable

MMR, with the rise in significant new launches, witnessed a rise in unsold inventory for the fifth quarter in a row. Unsold inventory rose 21 per cent YoY in the region, while housing prices continue to remain rangebound with a slight dip of 1% on a quarterly basis. However, Western Suburbs (beyond Dahisar) saw the highest increase in prices at 10 per cent YoY followed by Panvel with 8 per cent increase YoY. 

Bengaluru witnessed a steepest decline in unsold inventory, at 14% YoY 

While housing prices in Bengaluru increased 6 per cent YoY after remaining rangebound for the last two years, unsold inventory witnessed a sharp decline during Q3 2022, dropping by 14 per cent YoY. Amidst high inclination towards homeownership and higher disposable income, demand for large spaces and self-sustained properties is rising. During Q3 2022, unsold inventory dropped 34 per cent compared with Q3 2019 levels.