Knight Frank’s global house price index ranked India 14th in the third quarter of 2023, up 18.9% year-on-year. India residential real estate market is booming, making it the 14th most expensive in the world.
In September 2023, Knight Frank’s Global House Price Index showed a 3.5% YoY increase in home prices across 56 markets, up from 2.2% in the previous quarter.
Despite higher home loan rates and inflation threats, Knight Frank attributed India residential real estate market growth to its stable economic growth. State and central governments provided sops during the pandemic which triggered the market.
Increasing interest rates due to heightened inflation, strong domestic economic fundamentals, and the escalating aspirational characteristics of residential real estate are driving heightened demand among homebuyers in prominent residential markets in the country, according to Shishir Baijal, Knight Frank India’s chief marketing officer.
An Anarock report found that prices have increased sharply in a few micromarkets in India, particularly tech hubs in Hyderabad, Bangalore, and Pune. The price increases are anywhere between 28-33% in three years.
According to Baijal, urbanization is providing additional momentum to infrastructure development, paving the way for the development of residential hubs in Indian cities.
By the end of the third quarter of 2023, as many as 3.49 lakh units had been sold in the top 7 cities, compared to 3.65 lakh in 2022.
At the same time, the overall value of sold houses climbed to 3.48 lakh crore in the first nine months of 2023, 7% higher than all of 2022.
The property prices remained stagnant or declined for 5-6 years starting from 2013. Demand during this period was low. However, after Covid, we saw a substantial revival in demand, surpassing the previous highs,” said Prashant Rao, MD of Poulomi Estates.
It should be noted that while there was an overall surge in property prices nationwide, Hyderabad saw the most significant year-on-year increase due to the relocation of corporations to the city. This trend is likely to continue.
Global price increases are led by Turkey-india’s real estate market
As a result, Turkey holds the top spot in the rankings since Q1 of 2020, with a year-on-year growth of 89.2%. Greece (14%), Croatia (13.7%), and North Macedonia (11%) dominate the top five spots.
In the Asia-Pacific region, Japan leads with 6.3% annual growth, followed by India with 5.9%.
In light of rising mortgage costs, global house prices are surprising, but strong savings, above inflation settlements, and low supply are all supporting the market. According to Liam Bailey, global head of research, Knight Frank, low market liquidity will continue to be a big concern in 2024, with sales volumes falling up to a quarter from recent peaks. Only a lower interest rate will boost sales activity.
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