The rise in prices of residential properties did not impact sales during 2022 because of huge pent-up demand from the previous two years (2020 and 2021), says report
The housing price in 2022 rose an average 7 per cent across eight major cities to Rs 6,700 – 6,900 per square feet on account of an increase in the cost of construction, coupled with pent-up demand, according to a report by real estate consultant PropTiger.com. The eight major cities are Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi-NCR, Mumbai Metropolitan Region, and Pune.
According to the report titled ‘Real Insight’, the rise in prices of residential properties, however, did not impact sales during 2022 because of huge pent-up demand from the previous two years (2020 and 2021), which saw muted customer demand because of the COVID-19 pandemic.
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Vikas Wadhawan, group CFO of PropTiger.com, Housing.com & Makaan.com, said, “Housing prices remained by and large stable during the 2016-21 period. The year 2022 saw an appreciation in prices as the rates of key construction materials increased because of global headwinds like the Russia-Ukraine war. Strong revival in demand for both under-construction and ready-to-move-in units also played a role in the modest single-digit increase in prices,” said
He added that with the increase in the overall construction cost, builders were forced to raise the basic selling price (BSP) of apartments.
Gurugram saw the highest price appreciation of about 13 per cent, Bengaluru and Delhi-NCR both witnessed a 9 per cent growth in prices, followed by Pune 8 per cent. Ahmedabad and Kolkata saw 7 per cent appreciation each in housing prices, according to the report.
It added that the housing prices in Ahmedabad went up by an average 7 per cent year-on-year in 2022 to Rs 3,600-3,800 per square feet.
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Southern markets continue to rise wherein Bengaluru, the rates appreciated 9 per cent to 6,000-6,200 per square feet. Similarly, Chennai also grew by close to 5 per cent to 5,600-5,800 per square feet. Since Hyderabad has already seen high double-digit growth in the last few years, the market seems to be seeing some plateau in terms of growth rate.
Although the realty prices continue to rise in the city of Nawabs and grew by about 4 per cent to Rs 6,100-6,300 per square feet. In Delhi NCR, the prices of residential properties rose 9 per cent to Rs 4,800-5,000 per square feet. Among two major markets of Delhi-NCR, Gurugram saw a surge of 13 per cent to Rs 7,000-7,200 per square feet while Noida witnessed a growth of 7 per cent to Rs. 5,400-5,600 per square feet.
The prices appreciated by 7 per cent in Kolkata to Rs. 4,600-4,800 per square feet. Mumbai saw an increase of 5 per cent in housing prices to Rs 10,100-10,300 per square feet. Housing prices in Pune rose 8 per cent to Rs 5,500-5,700 per square feet in 2022 compared with the previous year.
Ankita Sood, head of research at PropTiger.com, Housing.com & Makaan.com, said, “Price rise primarily propelled by strong end-user demand, residential realty after a lull has also reinstalled investor confidence in the market which is witnessing its much-awaited upcycle. The residential prices have spiked up significantly in key micro markets of Gurugram, Hyderabad, and Bengaluru where we also see a premium being put on the little available (only 21 per cent of the total unsold stock) but much in demand ready-to-move-in segment. Also, there is a lot of NRI interest in the market owing to the weakening of the rupee.”
Housing markets covered in the report include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi-NCR (Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad), Mumbai Metropolitan Region (MMR) and Pune. In the MMR, Mumbai, Navi Mumbai & Thane are included.
