The premium residential market in major cities is seeing notable price appreciation, led by Gurugram with up to a 53 per cent increase, followed by NOIDA, according to the latest findings by Savills India, a global property consulting firm. The second home location, North Goa, also witnessed a steep rise of 28 per cent in villa prices over the year, owing to the rise in 'work from anywhere' or remote working and relatively high rental yields.
New launches in major residential cities more than doubled in H1 2024. Under-construction projects in the top three cities have seen higher price appreciation, up to 30 per cent over the year, compared to ready properties as new launches offered newer amenities and configurations. The continued price movement indicates strong demand in the premium housing market.
The heightened demand is further supported by the RBI, which maintained interest rates for the sixth consecutive time, expected to add momentum to the residential market.
Key trends observed in the top cities indicate a significant year-over-year (YOY) increase in capital values as of June 2024. In Delhi, completed developments saw a 3 per cent-27 per cent rise. Gurugram experienced a substantial growth, with completed developments appreciating by 30 per cent-44 per cent and under-construction properties by 13 per cent-53 per cent. NOIDA also reported notable gains, with completed developments increasing by 21 per cent-38 per cent and under-construction properties by 19 per cent-43 per cent.
Mumbai saw a more modest rise, with completed developments up by 1 per cent-7 per cent and under-construction properties by 1 per cent-21 per cent. Bengaluru's premium residential market grew by 3.2 per cent-7.5 per cent for completed projects and 5.2 per cent-11.5 per cent for under-construction ones.
North Goa villas witnessed a significant appreciation of 16 per cent-36 per cent, reflecting strong demand in the region. These trends underscore the continued strong demand and price appreciation in India's premium residential markets.
Mumbai
The rise in capital values for under-construction properties in Mumbai is sharper than for ready properties, which saw a 3 per cent YOY rise compared to a 5 per cent YOY increase for under-construction properties.
Central Mumbai and Western Suburbs (Others) witnessed a significant increase of 12 per cent-21 per cent YOY in capital values due to new launches at prices higher than the existing market average.
The market saw significant traction in demand for the luxury segment, with larger spaces in bungalows and prime residences being preferred due to the increasing trend of hybrid working, especially by professionals in the financial services and legal domains.
Bengaluru
Bengaluru's premium residential market saw a growth of 5-6 per cent YOY in capital values. Under-construction projects saw higher growth, averaging 7.2 per cent YOY, compared to about a 5.2 per cent YOY increase in newly completed projects as new projects were launched at higher prices along with strong demand.
Central Bengaluru saw the highest growth in capital values for completed projects at 7.5 per cent, followed by 6.2 per cent in East Bengaluru. The completion of the new metro route in East Bengaluru and strong demand from HNIs in Central Bengaluru have driven capital appreciation in these markets.
Delhi
The city saw a 16 per cent YOY increase in the average capital value of luxury floors. The South-East Delhi micromarket witnessed the highest price appreciation of 27 per cent on an annual basis for luxury floors, followed by the South-West micromarket with a YOY growth of 21 per cent.
The average capital values of residential plots saw a YOY growth of 25 per cent at the city level. The South-Central and South-West micromarkets led this trend, both recording the highest YOY growth rates at 29 per cent.
Gurugram
The average capital values of completed and under-construction properties hit a new peak with 37 per cent and 30 per cent YOY growth registered at the city level, respectively. New Gurugram and Dwarka Expressway were the top-performing micromarkets with annual growth of 53 per cent and 34 per cent, respectively, in average capital values of under-construction properties.
The city overall saw a 26 per cent YOY increase in the average capital value of residential plots, with the Dwarka Expressway micromarket registering the highest price growth at 43 per cent YOY.
Noida
Average capital values of completed and under-construction properties in NOIDA saw a significant YOY increase of 30 per cent and 29 per cent, respectively.
Sector 150 micromarket saw the highest growth in capital value for under-construction properties with 43 per cent YOY growth.
North Goa
Average capital values for villas in North Goa saw a steep rise of 28 per cent YOY. This increase is attributed to its growing popularity among homebuyers as a second home location, owing to high rental yields and a growing preference for gated villas among younger, lifestyle-focused buyers.
The market is witnessing a trend of young professionals, especially from major cities like Mumbai, Delhi, and Bengaluru, moving to Goa. These professionals often work in creative fields or are digital nomads seeking a better work-life balance. Homebuyers preferred gated villas along the coastal belt locations such as Anjuna, Arpora, Baga, Calangute, Candolim, and Vagator.
Due to rising land prices, the supply of villas in North Goa has seen a tremendous shift. The standard sizes of villas have shrunk to almost half, from 5,400 sq ft. to 2,700 sq ft. over the past five years.
Rental Trends
Mumbai
All micromarkets saw an increase in rental values, estimated in the range of 3 per cent-8 per cent YOY. This rise in rental values can be partly attributed to pent-up demand for rental properties due to the redevelopment of dilapidated buildings in the city. The market gained momentum as end-users increasingly considered leasing larger homes in projects with amenities. Properties near metro stations saw a substantial increase in rental values due to the convenience of a quick and reliable commute to major business hubs and entertainment districts.
Bengaluru
South and North Bengaluru saw significant growth of ~3 per cent YOY in rentals in premium residential developments. East and Central Bengaluru recorded a growth of ~2 per cent YOY in premium properties.
Delhi
Rental values increased by 31 per cent YOY in H1 2024 at the city level. The South-Central micromarket saw the highest annual growth in rentals at 38 per cent, followed by the Central 1 micromarket with a 36 per cent YOY increase.
Gurugram
Average rentals saw an increase of 18 per cent YOY at the city level. Dwarka Expressway and Golf Course Road saw the highest rise in rentals with 28 per cent and 19 per cent YOY growth, respectively.
Noida
Sector 150 and others micromarkets saw the maximum hike in rentals in H1 2024, with 12 per cent YOY growth.
New Launches Across Key Cities
Luxury unit launches in Delhi increased over 4X, with 1,300 new units launched in H1 2024.
Gurugram saw approximately 9,500 new luxury units launched in H1 2024, a 2X increase.
NOIDA saw a significant increase in new luxury unit launches, with approximately 2,200 units added in H1 2024.
Bengaluru saw 5,632 units launched in H1 2024 in the premium segment, a 156 per cent YOY growth. East Bengaluru accounted for 55 per cent of the new launches, while North Bengaluru contributed 23 per cent.
Shveta Jain, Managing Director, Residential Services, Savills India, said, "In H1 2024, buyer sentiment was upbeat, with investor interest gravitating towards new launches, while end-users sought ready-to-move-in properties. Older developments in grade A corridors witnessed increased demand from both buyers and tenants. The velocity of sales was better for villas and apartments with large balconies and green patches. The 4-bedroom format also garnered more attention in the luxury segment, applicable to both primary and secondary markets. The increase in new launches in Gurugram and Delhi also reflects a growing appetite for luxury residences. Interestingly, discerning buyers also sought green buildings, reflecting a growing demand for upscale, sustainable living beyond traditional amenities."
