Property values in top cities soar to decade highs
In 2023, India's top six cities saw a 10-15% increase in residential property values, the highest in a decade. This growth is due to factors like low inventory, increased buyer interest, and rising rental costs, according to a report by NoBroker, India's first property technology unicorn. Hyderabad and Bengaluru experienced the highest annual appreciation for two-bedroom homes at 15% and 13.5%, respectively, while Mumbai saw a 10.3% increase.
Rising rental costs drive homeownership
Saurabh Garg, co-founder and chief business officer of NoBroker, explained that "the rising rental costs ranging between 10-30%, sometimes equating to or surpassing home loan EMIs, have been a pivotal factor in convincing tenants to invest in their own homes." This trend has sped up the process of achieving homeownership for many people. The real estate market's demand is driven not only by first-time buyers but also by renters feeling the pinch in the current market.
Diversified investor base and robust pre-sales
Rental yields in major cities have reached up to 6%, making residential investments as attractive as commercial properties. Mallanna Sasalu, CEO of Provident Housing, said, "The diversified investor base is adding to the market's stability and growth." "The escalating rents have also acted as a catalyst by nudging fence-sitters to take a plunge into home ownership," Sasalu added. He also mentioned that this trend is particularly beneficial for first-time home buyers, with strong pre-sales being observed.
Record-breaking residential sales and new launches
During the first three quarters of 2023, India's top six property markets saw an unparalleled surge in new launches, with over 75,000 new residential apartments, a 25% increase compared to the same period last year. The residential market in Q3 2023 recorded the highest quarterly sales since 2008, at 69,600 units. Residential sales broke all records with average quarterly sales of over 65,000 units until the third quarter of 2023.
When will home prices be affordable again?
As told to the ET, Captain K Srinivas, CEO of Cornerstone Properties, said, "The country's real estate ecosystem has not only reclaimed its glory but has also matured immensely in terms of regulations, transparency, and innovation." "2023 has been a crucial year for the sector, and looking at the current rate of performance, we can anticipate that the momentum will persist."
