Global residential prices fall but high demand keeps Indian cities costly

The global rank of top Indian cities in terms of residential price rise has jumped significantly: Knight Frank

The residential price growth across the 107 top cities in the world slowed down significantly in the April-June quarter to 1.7 per cent year-on-year (y-o-y) from 11.7 per cent in the same quarter last year. But the fall has not been that sharp in Indian cities owing to high demand, findings of a report released on Friday showed.

According to real estate consultancy Knight Frank's "Global Residential Cities Index Q2 2023", as compared to the average of 1.7 per cent, Mumbai saw a price growth of 6 per cent YoY during the quarter, compared to 6.1 per cent last year. It was followed by Bengaluru and Delhi with price rises of 5.3 per cent from 8.9 per cent and 4.5 per cent from 6.5 per cent respectively.

 

The global rank of these cities in terms of residential price rise has jumped significantly. Mumbai now ranks 19th out of 107 countries as compared to 95th last year. Bengaluru's rank is now 22nd as compared to 77th last year. And Delhi's standing is now 25th against 90th last year.

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In the quarter, Chennai and Kolkata ranked 4th and 5th, respectively, among the Indian cities and globally at 39th and 40th, with a price appreciation of 2.5 per cent each. However, last year the cities stood at 107th and 114th globally.

"Residential prices have grown at a healthy clip along with strong demand since the beginning of 2022. Even while rates rose, consumer confidence remained buoyant leading to growing sales volumes. The comparatively strong economic fundamentals in India are expected to sustain demand momentum for residential assets, both for homebuyers and global investors," said Shishir Baijal, chairman and managing director of Knight Frank India.

Globally, Ankara saw the steepest price rise during the quarter at 105.9 per cent followed by 85.1 per cent in Istanbul and 17.4 per cent in Dubai.

Stockholm ranked the lowest in price appreciation, with a decline of 14.3 per cent.

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Liam Bailey, Global Head of Research at Knight Frank, said, "There is early evidence that conditions are beginning to improve in a number of key global city markets. While it's likely that rising rates are now behind us, homeowners can expect to contend with current interest rate levels for the foreseeable future, which will limit the pace of the global housing market's recovery."