In another sign of recovery in the real estate sector, housing prices in the top-eight cities registered a 5 per cent jump during April-June 2022 amid a surge in residential property demand. Unsold inventory also recorded a marginal decline in the second quarter of 2022 (Q2 2022), according to a report.
“Residential prices, which have surpassed pre-pandemic levels, have been seeing an upward trend led by rising demand amidst rising prices of construction materials. Delhi-NCR saw the highest increase in residential prices at 10 per cent YoY, followed by Ahmedabad and Hyderabad with 9 per cent and 8 per cent year-on-year (YoY) increase, respectively,” according to a joint report by Credai, Colliers and Liases Foras.
The report, titled ‘Housing Price-Tracker Report 2022’, also said the sales momentum that started in the latter part of last year continued in Q2 2022 as well, led by a pent-up demand and attractive pricing. Hence, despite rising prices and an increase in new launches in the last few quarters, unsold inventory saw a dip in the majority of the cities.
“Bengaluru witnessed the steepest decline of 21 per cent YoY in its inventory overhang, led by higher sales. Only Hyderabad, MMR and Ahmedabad saw an increase in unsold inventory, which was led by significant new launches. MMR still accounts for the highest share in unsold inventory at 36 per cent, followed by 14 per cent in Delhi-NCR and 13 per cent in Pune,” it added.
Harsh Vardhan Patodia, president of CREDAI National, said, “The central bank continues to increase repo rates to offset the impact of inflation and banks are expected to increase loan interest rates, including that of home loans. As captured in this report, the housing prices have increased in the range of 2-5 per cent across cities, as materials and labour costs continue to remain high. We may see a marginal dip in demand due to increasing interest rates, but I am confident that the sales will continue to grow across segments from September, as we enter the festive season.”
Ramesh Nair, chief executive officer (India) and managing director (market development- Asia) of Colliers, said, “The RBI has increased the repo rate amidst inflationary pressures and banks have already begun increasing the lending rates. However, the upcoming festive season is likely to keep the market sentiment high resulting in higher sales.”
Pankaj Kapoor, managing director of Liases Foras, said, “The price is expected to remain range-bound. With discounted EMI (equated-monthly instalment) schemes, we see early signs of developers absorbing the impact of increasing interest rates. Sales volumes are likely to improve as we see growing new supply with festive offers.”
The report said housing prices in Delhi-NCR have been rising for two years. The Delhi-NCR region saw the highest increase in prices across across India at 10 per cent with an average carpet price of Rs 7,434 per sq ft in Q2 2022. Golf course road saw the highest price rise of 21 per cent YoY, followed by Noida Expressway.
“The entire region’s inventory dropped 10 per cent YoY in Q2 2022, as developers focused on offloading older projects. While overall unsold inventory is the lowest in three years, the majority of the unsold inventory is concentrated in Noida extension and Greater Noida, followed by Ghaziabad,” it added.
The report said the Mumbai Metropolitan Region (MMR), which accounts for the highest unsold inventory at 36 per cent share, saw a 14 per cent rise in unsold inventory in the last year. The rise in unsold inventory was led by significant new launches in the city. Housing prices largely remained range-bound, with a slight rise of 1 per cent YoY. “However, Western suburbs (beyond Dahisar) saw the highest increase in prices at 12 per cent YoY. Unsold inventory in Central suburb extension accounts for 26 per cent, majority share in the price range of Rs 7,500-10,000 per sq ft. Bengaluru sees the steepest drop in unsold inventory at 21 per cent YoY.”
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