Housing prices surge nearly 5% in Jan-Sept period in 8 major cities

Across eight major cities in India the average housing prices appreciated nearly 5 per cent in the first nine months of this year on account of rise in input costs and a strong revival in demand, said a report published by property brokerage firm PropTiger.com on 21 November.

According to the report, the weighted average prices of residential properties in primary markets stood at ₹6,600-6,800 per square feet at the end of September quarter, as against ₹6,300-6,500 per square feet at the end of the December quarter across eight cities.

Part of Australia's REA Group and US-based News Corp -- REA India -- owns three real estate portals -- Housing.com, PropTiger and Makaan.com.

"We are witnessing a modest price increase in the primary housing market. This is mainly because of the sharp rise in prices of key raw materials like cement and steel," news agency PTI quoted the company's Group CFO Vikas Wadhawan as saying.

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Wadhawan added that apart from rising input cost, a strong revival in demand after the second wave of the COVID pandemic has put an upward pressure on prices.

"Housing prices are expected to further rise in the coming quarter on the back of robust demand, which is still strong despite the hike in the interest rates on home loans by around 2 per cent since May. Prices of key construction materials have eased but are still high as compared to the previous year," Wadhawan said.

In Ahmedabad, the housing prices surged 5 per cent to ₹3,600-3,800 per square feet in July-September period from ₹3,400-3,600 per square feet at the end of the 2021 calendar year.

While in Bengaluru, the residential properties appreciated by 6 per cent to ₹5,900-6,100 from ₹5,500-5,700 per square feet.

In Chennai, housing prices rose marginally by 2 per cent to ₹5,500-5,700 from ₹5,400-5,600 per square feet, while Delhi-NCR saw a 5 per cent rise in prices to ₹4,700-4,900 from ₹4,400-4,600 per square feet.

In Hyderabad, the housing prices increased 4 per cent to ₹6,100-6,300 per square feet from ₹5,900-6,100 per square feet.

Housing prices in Kolkata went up by 3 per cent to ₹4,400-4,600 per square feet, from ₹4,300-4,500 per square feet.

Mumbai saw a 3 per cent increase in prices to ₹9,900-10,100 per square feet from ₹9,700-9,900 per square feet, while Pune witnessed 7 per cent increase in prices to ₹5,500-5,700 per square feet in July-September 2022 from ₹5,100-5,300 per sq ft at the end of the 2021 calendar year.

"Apart from inflationary pleasure, the prices have also risen on account of the premium being charged for the ready-to-move-in residential units," PropTiger.com and Housing.com's Head of Research Ankita Sood said.

Another research by Anarock indicated that the top 8 cities closed at least 68 separate land deals accounting for 1,656 acres in the first nine months of 2022, compared to just 20 land deals for 925 acres were closed across these cities in the corresponding period last year.

“In terms of land area transacted, Hyderabad has seen the biggest land transactions so far this year,” says Santhosh Kumar, Vice Chairman – ANAROCK Group, adding, “In terms of total number of land deals, MMR clocked the highest number of deals; while the total area transacted was unspectacular, one must also consider the steep prices in this land-starved city.”

According to the research, Hyderabad saw 7 separate deals for 769+ acres, accounting for over 46% of the total land transacted between January-September. While the NCR sealed 16 separate transactions accounting for 14% of the total land deals covering approx. 234 acres which included 9 deals for a total of 197 acres in Gurugram, and 7 in Delhi, Faridabad, and Noida.

India's silicon city Bengaluru witnessed 9 separate deals for a total of 223 acres earmarked for residential, mixed-use, and a logistics park. While Pune saw 8 separate deals for approx. 124 acres, accounting for 7% of the total land area transacted across these cities.

Mumbai Metropolitan Region saw the highest number of transactions cumulatively accounting for just 199 acres, earmarked for residential and logistics developments. Chennai saw 7 deals for 92+ acres for a mixed-use development including residential, BPO and an industrial park, Ahmedabad closed 3 deals for approx. 9.6 acres and Kolkata closed 1 land deal for approx. 5.6 acres, the report said.

With PTI inputs.