Housing prices increase sharply in Q1CY23, see an average 7% YoY jump

A report by PropTiger.com said that all the markets covered in the analysis showed an upward movement in average rates of new homes

Housing prices in India have increased during the first quarter of 2023 (Q1CY23), with the average price rise across all the major cities being close to 7 per cent year-over-year (YoY), a report by PropTiger.com said.

According to the report, the average rate of new homes surged in all the markets included in the analysis.

The report also highlighted that Bengaluru, which has the sharpest upward trends in property prices, saw an average rate of 10 per cent appreciation last year.

Pune and Ahmedabad were close behind in the southern market in terms of price increase, witnessing 8 per cent and 7 per cent rise in their average property rates, respectively.

"Real estate has consistently been one of the best-performing asset classes over the long term, and with prices expected to go up further, it might be a good time for fence-sitters to take the jump and buy their dream home,” said Vikas Wadhawan, Group CFO, PropTiger.com.

The report stated that the cost of buying a house in India continues to rise due to a variety of factors, including rising raw materials and labour costs, growing demand for homes post-Covid, and the termination of government-funded subsidy schemes in March this year.

While the Reserve Bank of India (RBI) has paused rate hikes for now, inflation is still a concern and the RBI may raise the benchmark lending rate in the next cycle, which could further amplify costs for the buyers due to higher borrowing costs on home loans, the report said.

“Interestingly, while the weighted average prices have grown by 6 per cent YoY in the March quarter, key micro-markets in cities of Gurugram, followed by Bengaluru have seen YoY growth of 13 per cent and 10 per cent, respectively," said Ankita Sood, Head of Research, PropTiger.com.

She added, "Given the current market trends of demand-supply mismatch, we expect property prices to continue to rise albeit within a close range, where the quality ready-to-move-in segment will trade at a premium."

The report further indicates that the average price per square foot in cities such as Ahmedabad, Bengaluru, Delhi-NCR, Kolkata, and Pune also witnessed a significant increase.