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Housing prices rise 8% YoY in Q1 2023 amidst strong demand in the sector: CREDAI –

FWM by FWM
June 14, 2023
in National
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During Q1 2023, overall housing prices in India increased by 8% YoY; Delhi NCR continues to lead, at 16% YoY
• Overall unsold inventory expanded 12% YoY
• Delhi NCR witnessed the steepest decline in unsold inventory, at 9% YoY
India, 14th June 2023: Housing prices across the top eight[1] cities in India increased 8% YoY amidst strong housing demand and consistent quality launches by top developers. Delhi-NCR saw the highest increase in residential prices at 16% YoY, followed by Kolkata and Bengaluru with 15% and 14% YoY increase respectively. Despite rising interest rates, housing prices have been on the rise led by consistent demand seen since last year. As the interest rates are now expected to have peaked, a pause in the rising repo rate paired with healthy domestic economic outlook will keep the market sentiment upbeat.
CREDAI President Boman Irani, said “Owing to a conducive buying eco-system, homebuyers’ sentiment has been quite positive for the past few quarters. This is also validated by the sheer volume of sales that we have been witnessing in the recent past, especially in Tier 1 cities across India. Despite the rise in housing prices, which is primarily owing to rising raw material costs and this consistent demand, we expect the strong momentum to continue as consumers have shown a clear appetite to buy new, bigger houses with better amenities – especially in the post pandemic era. There is also a greater thrust on Green Development projects, with homebuyers inclined towards sustainable houses that are beneficial not just to the environment but also financially, in the long term.”

The top eight cities continued to witness a rise in new launches, as developers planned to tap the rising demand, owing to which the overall unsold inventory rose 12% YoY. With a spurt in new launches, about 95% of the unsold units in the top cities were under- construction. Hyderabad saw the highest jump in unsold inventory levels, at 38% YoY. At the same time Delhi NCR, Bengaluru and Chennai saw a dip in unsold inventory, on the back of significant rise in sales. MMR continued to account for the maximum share in unsold inventory at 37%, followed by Pune at 13%.
“The residential real estate in India bounced back post the pandemic and continues its strong momentum since the last year. Aided by increased preference for home ownership, relative affordability, quality supply, the sector has remained resilient, offsetting the challenges posed by higher interest rates amidst global headwinds. Given the positive market fundamentals, both end-users & investors can find their sweet spot in this sturdy market. Amidst this upswing, housing prices in India witnessed an 8% YoY rise during the first quarter of 2023.,” said Peush Jain, Managing Director, Occupier Services at Colliers India. Pan India residential prices Q1 2023 (in INR/sq ft) –
City Average Price Q1 2023 QoQ Change YoY Change
Ahmedabad 6,324 2% 11%
Bengaluru 8,748 6% 14%
Chennai 7,395 -1% 4%
Hyderabad 10,410 3% 13%
Kolkata 7,211 1% 15%
MMR 19,219 0% -2%
Delhi NCR 8,432 0% 16%
Pune 8,352 0% 11%
Source: Liases Foras, Colliers
All the prices are based on carpet area

Despite a 250-basis point increase in the RBIs repo rate since May 2022, the residential sector in India remained resilient through 2022 & in Q1 2023. The resultant increase in home loan interest rates, did not defer demand, as the momentum of sales continued unabated. With developers focusing on delivering relevant supply at the right price & location, residential real estate is expected to remain promising in 2023,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.
Housing prices in Delhi-NCR up 16% YoY, highest amongst the top eight cities
Housing prices in Delhi-NCR has seen a steady rise since the last eleven quarters. Notably, Dwarka Expressway witnessed a significant price rise at 59% YoY, largely led by opening of Central Peripheral Road and the loop connecting Dwarka expressway with NH-8. Housing prices in Golf Course Road too surged 42% YoY. The revised prices in Golf course road micro market now account for the highest property values in the region, surpassing the housing prices of Delhi micro market, which was the highest so far. The unsold inventory in the region dropped by 38% compared to the pre-pandemic levels, highest amongst the top eight cities of the country, indicating healthy market dynamics. The region also witnessed the steepest decline in unsold inventory at 9% YoY during Q1 2023, signaling positive consumer buying sentiment.Unsold inventory in Hyderabad swelled by 38% YoY during Q1 2023
Unsold inventory levels in Hyderabad went up by 38% YoY, highest among the top eight cities in India. The surge in unsold inventory can be largely attributed to the spurt in new project launches, particularly in the Northwest and Southwest regions of the city (Gachibowli, Kondapur, Nanakramaguda and Kokapet). Despite increase in unsold inventory, housing prices in Hyderabad have consistently shown a rise over the past nine quarters. Overall, housing prices in the city surged 13% YoY during Q1 2023.
Housing prices in MMR remain rangebound, unsold inventory up at 29% YoY
Housing prices in MMR largely remained stable, during Q1 2023. At the same time peripheral micro markets like Panvel witnessed a 9% increase on YoY basis, followed by western suburbs at 6.4%. Moreover, the region continued to account for the highest share in unsold units amongst the major cities in India. Unsold inventory has been consistently rising in the region for the last few quarters, led by new project launches in the city.
“FY 23 witnessed the highest-ever new launches and sales across major Indian cities in India. The trends will likely continue, the sale and supply will likely grow, and the price rise will be moderate,” said Pankaj Kapoor, Managing Director – Liases Foras.

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