Average housing prices up 7% across top eight cities in 2022: Report
1 min read . Updated: 07 Feb 2023, 05:31 PM IST
PremiumThe rise in prices of residential properties, however, did not impact sales during 2022 because of huge pent-up demand from the previous two years
New Delhi: Increase in cost of construction coupled with pent up demand lifted housing prices by an average 7% across eight major cities in 2022, according to PropTiger.com data.
“The average housing prices increased 7% last year across eight major cities to ₹6,700 - 6,900 per square feet as compared with the 2021 calendar year," it said.
As per our report Real Insight, the rise in prices of residential properties, however, did not impact sales during 2022 because of huge pent-up demand from the previous two years (2020 and 2021), which saw muted customer demand because of the Covid-19 pandemic.
“Housing prices remained by and largely stable during the 2016-21 period. The year 2022 saw an appreciation in prices as the rates of key construction materials increased because of global headwinds like the Russia-Ukraine war. Strong revival in demand for both under-construction and ready to move in units also played a role in modest single digit increase in prices," said Vikas Wadhawan, Group CFO, PropTiger.com, Housing.com & Makaan.com
With the increase in the overall construction cost, builders were forced to raise the basic selling price of apartments, he added.
According to the report, Gurugram saw highest price appreciation of about 13%, while Bengaluru and Delhi-NCR witnessed a 9% growth in prices, followed by Pune 8%. Ahmedabad and Kolkata 7% each.
Housing prices in Ahmedabad rose by an average 7% year-on-year in 2022 to ₹3,600-3,800 per square feet.
“Southern markets continue to rise wherein Bengaluru, the rates appreciated 9% to 6,000-6,200 per square feet. Similarly, Chennai also grew by close to 5% to 5,600-5,800 per square feet. Since Hyderabad has already seen high double-digit growth in the last few years, the market seems to be seeing some plateau in terms of growth rate. Although the realty prices continue to rise in the city of Nawabs and grew by about 4% to ₹6,100-6,300 per square feet," it said.
In Delhi NCR, the prices of residential properties rose 9% to ₹4,800-5,000 per square feet. Among two major markets of Delhi-NCR, Gurugram saw a surge of 13% to ₹7,000-7,200 per square feet while Noida witnessed a growth of 7% to Rs. 5,400-5,600 per square feet.
The prices appreciated by 7% in Kolkata to Rs. 4,600-4,800 per square feet, while Mumbai saw an increase of 5% in housing prices to ₹10,100-10,300 per square feet. The housing prices in Pune rose 8% to ₹5,500-5,700 per square feet in 2022 compared with the previous year.
“We believe that housing prices will continue to grow in single digits during 2023 as demand continues to be strong. The input cost has eased a little bit, especially steel prices, but rates of other materials are still high," Wadhawan said.
The new supply is largely coming from trusted developers as demand is getting consolidated towards such builders to avoid risks.
“Modest growth in prices is also healthy for the market as it will encourage investors to return to the housing market. In the last 6-7 years, the residential market has been largely dominated by end users but now we expect investors‘ interest to rise," he added.
