Mumbai reports 4th highest rise in home prices globally: Knight Frank

The price rise was the steepest in Manila at 21.2%, followed by 15.9% in Dubai and 10.4% in Shanghai

In the 12-month period that ended on September 30, Mumbai reported the fourth highest rise in home prices globally, real estate consultancy Knight Frank said in a report on Wednesday. During the period, the residential prices in the city rose 6.5 per cent. Delhi ranked 10th on the list with a price rise of 4.1 per cent.

According to the consultancy's Prime Global Cities Index, which tracks price movement in residential markets across 46 cities globally, the price rise was the steepest in Manila at 21.2 per cent. It was followed by 15.9 per cent in Dubai and 10.4 per cent in Shanghai.

 

Bengaluru ranked 17th on the list with a price appreciation of 2.2 per cent. On the whole, the 46 cities in the index saw a price rise of 2.1 per cent.

"The robust price trend in the upper end of the market coupled with strong sales momentum has elevated Mumbai's position in this global ranking scale," said Shishir Baijal, chairman and managing director at Knight Frank India.

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At the same time last month, Mumbai ranked 22nd on the list. Delhi was at 36th place and Bengaluru 27th. Baijal added that the demand was higher in the high-end homes.

"Sales momentum is significantly stronger in the higher ticket sizes today than it has been in the past five years," he said.

Amid high interest rates and uncertainty around inflation, however, the consultancy warned that the demand was fragile.

"Higher rates mean we have moved into a world of lower asset price growth - and investors will need to work harder to identify opportunities for outperformance to secure target returns," said Liam Bailey, global head of research at Knight Frank.

The report added, "With inflation edging lower, and interest rates largely held by central banks, market demand for residential property has improved in several markets, contributing to improvements in our index results. That said, this revival in demand is fragile and could be pushed off course if inflation surprises on the upside."

Knight Frank added that a more sustained upswing in demand and pricing will only be achieved once rates begin to move lower – which is unlikely to take place before mid-2024.