According to an analysis by PropTiger.com, a subsidiary of REA India, a drastic increase in property prices across the eight major residential markets in India has been registered over the last year. With a dramatic 57% year-on-year increase, Delhi-NCR witnessed the highest jump in property prices among cities. Experts attribute this sudden price hike to an increase in construction costs, high-end demand, and favorable economic conditions. 

A report called ‘Real Insight Residential: July-September 2024’ indicates that except for almost all the markets studied, in Delhi-NCR, have seen double-digit price gain during the July-September quarter of this year compared with corresponding periods last year. Among the factors driving up the prices in this upward cycle is a steady demand for luxury residential units and investor confidence that has come back strongly. 

PropTiger.com also states, “Repo rate of the RBI has remained unchanged at 6.5% in the past ten policy meets, and the effect is visible on housing affordability. As interest rates have remained relatively high, stress in terms of finance has attracted both developers and consumers alike, imparting a pressure that has an effect on general market conditions.” 

Except of course for the cities of Ahmedabad and Mumbai, as well as Bengaluru also registered an increase in the range of 15% to 21%. Chennai and Kolkata recorded a tremendous growth figure of 22%, which reflects tremendous economic activity along with the resilient demand in housing among the metros. Pune is usually considered as the economically liberal cousin of Mumbai, and it has registered an increase of 18%, which promises its prospect for homebuyers. 

Hyderabad, one of the major IT destinations, reflected the least growth at merely 7%, leading to the view that it has a more mature, stable market compared to its cousins. Quarter-to-quarter data reflects most cities posting minor increases in price or very slight plateaus, but overall market sentiment is optimistic. 

Vikas Wadhawan, CFO of REA India and Business Head of PropTiger.com, believes the real estate sector would be the growth engine of the Indian economy and refers to factors such as continued infrastructure development, smart city initiatives, and the increasing importance of tier 2 and tier 3 cities as long-term drivers of growth. Such dynamics will ensure the Indian real estate market is a mixed bag for strategic investors across asset classes.