High demand pushed home prices up 20% in 2023 as compared to 2021: Report

The highest rise in prices was witnessed in Delhi-NCR, followed by Bengaluru and Kolkata

Owing to high demand aided by a favourable interest rate cycle and positive economic outlook, home prices across the top eight cities in India surged 20 per cent in 2023 as compared to 2021, a report released on Wednesday showed. The highest rise in prices was witnessed in Delhi-NCR.

According to the CREDAI–Colliers-Liases Foras Housing Price-Tracker Report, the home prices in Delhi-NCR rose 32 per cent in 2023 as compared to 2021. It was followed by 31 per cent in Bengaluru and 30 per cent in Kolkata.

"The year-on-year increase in housing prices is a combination of a number of factors – characterised by strong, robust demand from homebuyers – especially for mid and premium segments, along with the existence of a conducive buying eco-system coupled with healthy macro-economic factors, and the rise in prices of construction materials," said Boman Irani, president of CREDAI National.

 

As compared to 2022, however, the price rise in 2023 was at a lower 9 per cent. In the last one year, the highest rise in home prices was seen in Bengaluru (21 per cent), followed by Kolkata (11 per cent) and Hyderabad and Pune (10 per cent each).

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"The year outperformed in several areas, including an uptick in high-end & luxury segments, scaling a new peak in sales volume, infrastructure-led development, resulting in deeper price discovery across most of the markets," added Badal Yagnik, chief executive officer at Colliers, India.

Interestingly, in Delhi, despite the rise in prices, the inventory fell by 19 per cent.

"Over the last two years from 2021 to 2023, cities like Delhi-NCR, Chennai and Pune, registered a notable decrease in unsold inventory. While Delhi NCR led the pack with a significant 19 per cent drop, Chennai and Pune followed closely with about 5-10 per cent drop each," said Vimal Nadar, senior director and head of research, Colliers India.

The report highlighted that in the fourth quarter of 2023, almost all the major regions in Delhi NCR witnessed a dip in prices as compared to a year ago. This included Delhi (-36 per cent), Dwarka Expressway (-4 per cent), Faridabad (-9 per cent), Ghaziabad (-25 per cent), Sohna Road (-19 per cent), Greater Noida (-32 per cent), Noida Expressway (-10 per cent) and Noida Extension (-18 per cent).

Only Golf Course Road saw the home prices appreciate by 9 per cent.

However, experts said the demand for homes is likely to stay high in 2024. 

"With an expected steady rise in income levels coupled with positive market sentiment, the demand momentum is likely to remain strong in these markets," added Nadar.