Housing prices increased by up to 11 per cent annually across eight major cities during January-March period of this year due to a rise in demand for residential properties and a sharp hike in rates of construction raw materials, according to a joint report by CREDAI, Colliers and Liases Foras.
Delhi-NCR witnessed highest rise in housing prices by 11 per cent to Rs 7,363 per sq ft during January-March 2022 as compared to the year-ago period, as per the first edition of Housing Price-Tracker report by realtors body CREDAI, real estate consultant Colliers and data analytics firm Liases Foras.
Hyderabad witnessed 9 per cent increase in housing prices to Rs 9,232 per square feet, while Ahmedabad saw an 8 per cent appreciation to Rs 5,721 per square feet and Kolkata 6 per cent to Rs 6,245 per square feet.
Housing prices in Bengaluru, Chennai and Mumbai Metropolitan Region (MMR) rose by 1 per cent each at Rs 7,595, Rs 7,107 and Rs 19,557 per square feet, respectively.
In Pune, prices of residential properties went up by 3 per cent to Rs 7,485 per square feet during the first quarter of this calendar year.
"A pick-up in housing demand across most cities and skyrocketing prices of raw materials for almost two years, led to YoY increase in housing prices, surpassing pre-Covidlevels across all eight metro cities," a joint statement said.
The average residential prices in India rose by 4 per cent YoY (year-on-year) from January-March 2022 after a prolonged slowdown, indicating that the residential market is on its path to recovery.
Colliers India CEO Ramesh Nair expects a further increase of 5-10 per cent in housing prices over the next 6-9 months.
"It is exciting to see India's residential market performing well and beating market expectations after so many years. End-users have faith in the market, and we expect credible developers to see higher sales this year as end-users are discerning about the reputation of the developer," he said.
Nair said there could be a meaningful increase in prices over the next 6-9 months in the range of 5-10 per cent across most of the markets.
Pankaj Kapoor, Managing Director, Liases Foras, said, "January-March quarter 2022 witnessed the new launches back to the pre-Covid level. The coming quarters see an increasing flow of new launches. The fresh supply will induce an improvement in volumes. Thus, the sales will continue to grow despite the recent increase in the interest rates".
CREDAI President Harsh Vardhan Patodia said, "Price hike has been an ongoing issue, but we are pleased with the finance minister and the government's intervention to control the rise in the cost of raw materials and in turn control inflation as the Indian economy had stayed resilient while grappling the strains of cost inflation of raw material prices in the last 18 months."
The measures to reduce import duties on steel products, iron ore, and steel intermediaries will help in reduction in prices of steel products, leading to a lowering in the cost of construction of real estate projects, he added.
The lowering of custom duties on coal products will further aid the production of cement and shall help control the skyrocketing prices of cement, Patodia said.
"It will be important to capitalise on the current situation and help the sector back to a U-shaped recovery and the reduction in prices of fuel tax to pre-Covidlevels will provide an added impetus to help all sectors agnostic of their business and it's respective consumers," the CREDAI President said.
Patodia suggested the state governments to reduce duties on fuel.
CREDAI sincerely hopes that manufacturers will pass on the price cuts to end-users.
"This will help the real estate developers negate increased construction costs over the last two years, which will only help prospective homebuyers," Patodia said.