Report Highlights Growth in Real Estate Prices Across Top Cities

Report Highlights Growth in Real Estate Prices Across Top Cities

July 2024: The premium residential market in major cities has witnessed significant price appreciation, led by Gurgaon with up to 53% increase, followed by Noida with 43% increase, according to a report by property consulting firm Savills India. The second home location, North Goa, also recorded a steep rise of 28% in villa prices over the year owing to the increase in ‘work from anywhere’ or remote working and relatively high rental yields.

The report stated that the under-construction projects in the top three cities had witnessed higher price appreciation of up to 30% over the year compared to ready properties as new launches offered newer amenities and configurations. The continued price movement indicates strong demand in the premium housing market.

The heightened demand is further supported by the RBI which maintained interest rates for the sixth consecutive time, which is expected to add momentum to the residential market.

Price trends in key cities

Mumbai

According to the report, the rise in capital values for under-construction properties in Mumbai is sharper than for ready properties which saw a 3% YOY rise compared to a 5% YOY increase for under-construction properties. The micro-markets of Central Mumbai and Western Suburbs (Others) witnessed a significant increase of 12%-21% YOY in capital values due to new launches at prices higher than the existing market average.

The market witnessed significant traction in demand for the luxury segment. Larger spaces in bungalows and prime residences were preferred due to the increasing trend of hybrid working, especially by professionals in the financial and legal sectors.

Bangalore

The report mentioned that Bangalore’s premium residential market witnessed a 5-6% YOY growth in capital values over the year. The under-construction projects saw higher growth, averaging 7.2% YOY, compared to about a 5.2% YOY increase in newly completed projects as new projects were being launched at higher prices along with strong demand.

Central Bangalore saw the highest growth in capital values in completed projects at 7.5%, followed by 6.2% in East Bangalore. The completion of the new metro route in Eastern Bangalore and strong demand from HNIs in Central Bangalore have been the major driving factors for capital appreciation in these markets.

Delhi

The report highlighted that Delhi witnessed an increase of 16% YOY in the average capital value of luxury floors. The micro-market of southeast Delhi witnessed the highest price appreciation of 27% on an annual basis for luxury floors. This is followed by the southwest micro market, which registered a YOY growth of 21%. The average capital values of residential plots witnessed a YOY growth of 25% at the city level. The South-Central and South-West micro markets led this trend, with both recording the highest YOY growth rates at 29%

Gurgaon

According to the report, the average capital values of completed and under-construction properties hit a fresh peak, with 37% and 30% YOY growth registered at the city level, respectively. New Gurgaon and Dwarka Expressway were the top-performing micro markets, with an annual growth of 53% and 34% in average capital values of under-construction properties. The city witnessed an increase of 26% YOY in the average capital value of residential plots. The Dwarka Expressway micro market registered the highest price growth, with a 43% YOY increase.

NOIDA

The Average Capital values of completed and under-construction properties in NOIDA witnessed a significant YOY increase of 30% and 29%, respectively. With 43% YOY growth, the sector 150 micro-market witnessed the highest growth in capital value for under-construction properties.

North Goa

The report stated that average capital values for villas in North Goa saw a steep rise of 28% YOY. This increase in prices is attributed to its rising popularity among homebuyers as a second home location owing to high rental yields, a growing preference for gated villas, and a demographic shift towards younger, lifestyle-focused buyers.

It highlighted that the market is witnessing a trend of young professionals moving to Goa, especially from major cities like Mumbai, Delhi, and Bangalore. These professionals often work in creative fields or are digital nomads seeking a better work-life balance. Homebuyers preferred gated villas along the coastal belt locations, such as Anjuna, Arpora, Baga, Calangute, Candolim, and Vagator.

Due to rising land prices, the supply of villas in North Goa has seen a tremendous shift. The standard sizes of villas have shrunk to almost half from 5,400 square ft (sqft) to 2,700 sqft over the past five years.

Shveta Jain, managing director, of Residential Services, Savills India said, “In H1 2024, the buyer sentiment was upbeat, with investor interest gravitated towards new launches, while end-users sought ready-to-move-in properties. Older developments in grade A corridors witnessed increased demand from both buyers and tenants. The velocity of sales was better for villas and apartments with large balconies and green patches. The 4-bedroom format also garnered more attention in the luxury segment, applicable to both primary and secondary markets. The increase in new launches in Gurugram and Delhi also reflects a growing appetite for luxury residences. Interestingly, discerning buyers also sought green buildings, reflecting a growing demand for upscale, sustainable living beyond traditional amenities.”

Rental trends across key cities

Mumbai

According to the Savills India Research report, all micro markets saw an increase in rental values, estimated in the range of 3%-8% YOY. The rise in rental values can be partly attributed to pent-up demand for rental properties due to the redevelopment of dilapidated buildings in the city.

The Real estate market gained momentum as end-users increasingly considered leasing larger homes in projects with amenities. Properties located near metro stations witnessed a substantial increase in rental values. The convenience of a quick and reliable commute to major business hubs and entertainment districts is highly sought after by homebuyers.

Bangalore

As per the report, South and North Bangalore saw a significant growth of around 3% YOY in rentals in premium residential developments. ​Similarly, East and Central Bengaluru recorded an increase of around 2% YOY in premium properties.

Delhi

The rental values increased by 31% YOY in H1 2024 at the city level. The south-Central micro-market witnessed the highest annual growth in rentals at 38% followed by the Central 1 micro market which observed a 36% YOY increase, the report said.

Gurgaon

The average rentals registered an increase of 18% YOY at the city level. Dwarka Expressway and Golf Course Road saw the highest rise in rentals with 28% and 19% YOY growth, respectively, the report mentioned.

NOIDA

According to the report, Sector 150 and NOIDA Others micro-markets with 12% YOY growth, saw the maximum hike in rentals in H1 2024.

New launches across key cities

According to the report, luxury unit launches in Delhi increased over 4X, with 1,300 new units launched in H1 2024. With around 9,500 luxury units, new launches in Gurgaon increased 2X in H1 2024. New launches of luxury units in NOIDA saw a significant increase, with nearly 2,200 units added in H1 2024. With 5,632 units launched in H1 2024 in the premium segment, Bangalore saw a 156% YOY growth. East Bangalore accounted for 55% of the new launches, while North Bangalore contributed 23%.

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