'Housing prices see 6% rise during Q3 of CY2022 in top 8 cities'

NEW DELHI: Housing prices across the top eight cities, namely Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad, continue to grow at 6 per cent year-on-year during July-September of 2022 amidst robust housing demand and quality launches by top developers, a report said on Wednesday.

Since the beginning of 2022, housing prices had been on the rise on the back of increased demand seen since last year, paired with rise in input prices, a joint report of CREDAI, Colliers India and Liases Foras said.

Delhi-National Capital Region saw the highest increase in residential prices at 14 per cent y-o-y, followed by Kolkata and Ahmedabad with 12 per cent and 11 per cent increase, respectively, it said.

The report said new launches had been on the rise since the beginning of the year as the market regained momentum after a hiatus, despite rising interest rates and input costs since the beginning of the year. Overall, unsold inventory rose 3 per cent y-o-y.

Owing to the spike in launches in the past few quarters, around 94 per cent of the unsold inventory in India is under construction, the report said, adding that majority of the cities saw a dip in unsold inventory, with Bengaluru witnessing the steepest decline of 14 per cent y-o-y, led by higher sales.

Only Hyderabad, Mumbai Metropolitan Region (MMR) and Ahmedabad saw an increase in unsold inventory, led by significant new launches. The report said MMR continued to account for the highest share in unsold inventory at 37 per cent, followed by 13 per cent in Delhi- NCR and Pune each.

"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 stabilise in the first half (H1) of 2023," stated Harsh Vardhan Patodia, President of CREDAI National.

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

"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 for India and Managing Director, Market Development for Asia, Colliers.

Mumbai Metropolitan Region (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 y-o-y in the region, while housing prices continue to remain range-bound with a slight dip of 1 per cent on a quarterly basis. However, Western Suburbs (beyond Dahisar) saw the highest increase in prices at 10 per cent y-o-y, followed by Panvel with 8 per cent increase y-o-y.

"The aggregated sales of three-quarters of CY22 (calendar year 2022) are 16 per cent higher than the aggregate similar three quarters sales of CY21. Despite increasing interest rates and marginal property prices, there is still parity between the prices and affordability; sales volumes are likely to stay strong. The year 2022 is slated to pose highest ever sales in the residential market in India," said Pankaj Kapoor, Managing Director, Liases Foras.

While housing prices in Bengaluru increased 6 per cent y-o-y after remaining range-bound for the past two years, unsold inventory saw a sharp decline during Q3 2022, dropping by 14 per cent y-o-y, the joint report said. Amidst high inclination towards home-ownership 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, according to the report.