Residential prices surge by 49% in five years in Delhi and Mumbai
July 7th, 2024
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Record housing sales have resulted in decline of unsold inventory and average residential prices to soar by 49% between H1 2019 and H1 2024 in Delhi and Mumbai.
NCR recorded a 49% five-yearly jump in average residential prices from Rs 4,565 per sq. ft. to Rs 6,800 per sq. ft.
"The pandemic was an undisguised blessing for the National Capital Region. Once infamous for high unsold inventory fed by speculative demand and supply, the region has seen a sharp decline of over 52% in its unsold stock in the last five years – from approximately 1.82 lakh units at H1 2019-end to approximately 86,900 units by H1 2024-end,” said Anuj Puri, Chairman - Anarock group.
The steep rise of housing prices in Delhi-NCR and MMR is attributable to steep hikes in construction costs as well as healthy sales. Prices in both regions had maintained status quo from late 2016 to 2019. Just when these two markets were beginning to see green revival shoots, the pandemic struck.
The COVID-19 pandemic was a boon for these two residential markets, causing demand to soar to new heights. Initially, developers induced sales with offers and freebies; but with demand heading north, they gradually increased average prices. Strong sales helped unsold inventory to decline in the period, especially in NCR.
“The surge in demand for homes underscores a fundamental shift in people's perception of homeownership, where the value of having a place to call home has become more apparent than ever before. There has also been a newly stirred up insistence on luxurious integrated townships that offer affluent homes, safety, and security to the homebuyers,” said Aakash Ohri, Joint Managing Director and Chief Business Officer, DLF Ltd.
The inventory overhang has reduced to 16 months in NCR in H1 2024 as against 44 months back in H1 2019.
Conscious curtailment of fresh supply was a major factor that helped the region to clear its stock. Data indicates that only about 1.72 lakh units were launched in NCR between H1 2019 and H1 2024.
“The real estate market is experiencing significant demand for luxury housing and independent floors. This demand is driven by millennials looking for a lifestyle of convenience. Gurugram has played a key role in the surge of launches in Delhi NCR,” said Vivek Singhal, CEO, Smartworld Developers.
MMR’s current available stock is at approximately 1.95 lakh units. In the last five years, the region has seen a 13% decline in its unsold stock - largely on account of substantial new launches to meet resurgent demand.
MMR has seen over 5.26 lakh units launched between H1 2019 and H1 2024 - thrice the new supply in NCR in this period. The inventory overhang in the region came down 14 months as of H1 2024-end from 34 months back in H1 2019-end.
Source: economictimes.indiatimes.com
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