India’s tech hubs like Bangalore’s Whitefield and Hyderabad’s HiTech city areas like Gachibowli and Kondapur have seen their property prices zoom in the last three years. These three areas topped the list of micro residential markets that saw the sharpest property price hike in October 2023, as compared to the same month in 2020.
In Gachibowli, the average residential prices as of October 2023-end stand at around ₹6,355 per square ft. In the corresponding period of 2020, average prices in this locality were ₹4,790 per sq. ft, as per data by real estate consultancy firm Anarock Research. Kondapur recorded a 31% average price rise in this period with Bengaluru’s Whitefield coming in third with a 29% jump in the three-year period.
“Hyderabad also has a higher scope of price appreciation because pre-Covid-19, the city’s average prices were relatively lower than in Bengaluru’s IT/ITeS hubs. As of 10M 2023, the average prices in Hyderabad’s key micro markets are almost at par with Bengaluru’s IT-led housing hotspots,” said Prashant Thakur, regional director & head of research at Anarock Group.
Pune’s Wagholi area and Delhi’s Greater Noida West also saw a sharp surge in property prices. Several areas in the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) exhibited hikes in average property prices, ranging from 13-27%.
Property prices won’t affect demand say experts
The rise in property prices is starkly different from the situation in 2020 when the prices were stagnant due to low demand and inventory overhang. Up until the pandemic year of 2020, the average property prices had remained range-bound, says Anarock. The high demand fuelled by the pandemic has altered the fortunes of the sector. The recently concluded festive season saw a sharp jump in registrations across key markets, particularly in Mumbai where they jumped 30%.
“Barring discounts, 2020 was a year of price stagnation and a year most developers would prefer to forget. The scenario in 2023 is markedly different – backed by strong demand, housing sales across the top 7 cities have created a new peak this year with sales far exceeding the previous peak of 2014,” said Thakur.
In the third quarter of 2023, as many as 1.2 lakh units were sold across top 7 cities. This is 36% higher than the sales seen in the same quarter of 2022 when 88,230 units were sold.
Apart from good demand, the rise in input prices also pushed developers to hike prices. Developers are also confident that these price hikes will be absorbed by buyers.
“Property prices have surged in the last few years, driven by various factors such as increased input and construction costs, rising land prices, and heightened demand. Moreover, there is a noticeable shift in homebuyer preferences towards larger homes with enhanced amenities, contributing to the upward trajectory of prices. Despite these increases, the industry has successfully absorbed the higher costs, and demand remains substantial,” said Ravi Aggarwal, co-founder & MD of Signature Global.
Source: Business Insider India