A resurgence in residential demand has led to a 5% increase in prices across the top eight cities (Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad) while registering a marginal decline in unsold inventory during Q2 2022.
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% YoY, followed by Ahmedabad and Hyderabad with 9% and 8% YoY increase respectively.
The sales momentum that started in the latter part of last year continued in Q2 2022 as well, led by 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% 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%, followed by 14% in Delhi- NCR and 13% in Pune.
Harsh Vardhan Patodia, President of CREDAI National stated, “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 between 2 – 5% 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”.
“Rising homeownership amongst millennials supported by higher disposable income and willingness to upgrade to larger spaces equipped with better amenities have sparked a sharp growth in housing demand in the last few quarters. Demand for self-sustained properties replete with best-in-class amenities has also been increasing post-pandemic. These have led to strong growth in housing sales in the last few quarters. Prices have also seen a 5% rise on YoY basis. 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.” said Ramesh Nair, Chief Executive Officer | India & Managing Director, Market Development | Asia, Colliers.
“Price to remain range bound. With discounted EMI 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, said Pankaj Kapoor, Managing Director, Liases Foras”.
