Mumbai, Delhi luxury home prices rise over 11% in 2024; Bengaluru drops

Mumbai recorded the third-highest Y-o-Y growth in prime residential prices globally

Planning to buy a luxury home in Mumbai or Delhi? Brace for high prices. The two cities experienced a notable increase in prices of prime residential properties in the first quarter of FY24. Bengaluru saw a slight decline, according to Knight Frank's 'Prime Global Cities Index Q1 2024' report.

Take a look at the statistics

Mumbai recorded the third-highest year-on-year (Y-o-Y) growth in prime residential prices globally, jumping from the sixth position in Q1 2023 to the third position in Q1 2024. This surge was driven by strong demand for higher-value properties.

New Delhi also climbed the rankings, moving from 17th place in Q1 2023 to 5th place in Q1 2024, with a 10.5 per cent Y-o-Y growth in residential prices.

Meanwhile, Bengaluru slipped from the 16th to the 17th position, despite recording a 4.8 per cent Y-o-Y increase in prices.

Economic growth and housing prices

According to Knight Frank India's economic growth – annual GDP exceeding 8 per cent – has influenced the rise in house prices in its major cities."

This trend reflects a broader global phenomenon, where prime residential prices in 44 markets saw a 4.1 per cent increase in the 12-month period ending March 2024. This marks the fastest rate of growth since Q3 2022.

Shishir Baijal, chairman and managing director at Knight Frank India, said the strong demand for residential properties globally, especially in gateway markets of Asia-Pacific and EMEA. He attributed the improved rankings of Mumbai and New Delhi to resilient sales growth volumes.

"We expect the momentum of sales to remain stable over the next few quarters as the economic conditions are likely to remain broadly unchanged," Baijal said.

Global leaders

Manila: Topping the list with a 26.2 per cent annual rise in prices, Manila's growth is driven by strong economic performance and substantial infrastructure investments.

Tokyo: With a 12.5 per cent Y-o-Y growth, Tokyo jumped 17 places to second rank. This increase is due to favourable mortgage terms and a weaker yen, attracting foreign investment despite Japan's overall population decline.

Market dynamics

The Prime Global Cities Index, which tracks the movement of prime residential prices across 44 cities, shows a 4.1 per cent annual growth rate. Liam Bailey, Knight Frank's Global Head of Research, pointed out that this rebound indicates healthy demand and low supply volumes rather than a return to boom conditions. He added, "The pivot in rates – when it comes – will encourage more vendors into the market, leading to a welcome return to liquidity in key global markets."