Home prices surge in India as sales slow down
With a steady rise in home prices, experts are now weary that sales may be affected due to affordability factors.
- Aug 31, 2024,
- Updated Aug 31, 2024 8:46 PM IST
After growing by leaps and bounds for over two years, home sales have started to face challenges in the country’s recently revived housing market. The new-found vigor, primarily after the COVID-19 pandemic and the lockdowns, continued to till early-2024 but it seems to be slowing now – raising concerns among industry stakeholders and experts alike.
Data from Anarock Property Research shows, that after growing at a fast clip for the past two and half years, the country’s housing market has begun to show signs of fatigue among homebuyers, and sales of new homes declined for the first time in the April-June quarter.
Sales in the June quarter (Q2) fell by 8% sequentially. In Q2, 2024, some 120,340 housing units were sold, which was 8% lower than the 130,170 unit sales in the January-March quarter (Q1). Among the key markets, Hyderabad reported the steepest decline - down 23% quarter-on-quarter. Followed by Kolkata (-18%), Chennai (-9%), Bengaluru (-8%) and Pune (-8%). IN the Mumbai Metro Region, the largest real estate market in the country, sales declined 3% sequentially.
It was only in Delhi-NCR, where home sales grew q-o-q by 6% to 16,550 units. However, due to a steady fall in sales over the past two years, the market in Delhi-NCR has shrunk considerably and is now featured at 5th spot in the pecking order.
Prices, however, continue to rise. Homes in the national capital region of Delhi (NCR) and Mumbai Metro Region (MMR) have become costlier by half over the last five years. In NCR, a market that had struggled for close to a decade pre-Covid from growing inventories and poor off-take, has witnessed massive demand for residential homes. The average price in the market, as result, has jumped 49% between H1, 2019, and H1, 2024. While in the country’s largest property market - MMR homes have become costlier by 48% during the same period.
According to analysts at Anarock, the bull run in residential sales across the top 7 cities tamed down marginally in the second quarter of 2024, on the backdrop of increasing property prices and a high base record of the previous quarter (Q1 2024).
“The quarterly decline seen in housing sales is essential because of the all-time high base considered in the previous quarter when more than 1.30 lakh units were sold. Most importantly, this drop is also due to the significant hike in property prices over the last one year, which in turn has prompted many investors to take a breather,” says Anuj Puri, Chairman, Anarock Group.
After growing by leaps and bounds for over two years, home sales have started to face challenges in the country’s recently revived housing market. The new-found vigor, primarily after the COVID-19 pandemic and the lockdowns, continued to till early-2024 but it seems to be slowing now – raising concerns among industry stakeholders and experts alike.
Data from Anarock Property Research shows, that after growing at a fast clip for the past two and half years, the country’s housing market has begun to show signs of fatigue among homebuyers, and sales of new homes declined for the first time in the April-June quarter.
Sales in the June quarter (Q2) fell by 8% sequentially. In Q2, 2024, some 120,340 housing units were sold, which was 8% lower than the 130,170 unit sales in the January-March quarter (Q1). Among the key markets, Hyderabad reported the steepest decline - down 23% quarter-on-quarter. Followed by Kolkata (-18%), Chennai (-9%), Bengaluru (-8%) and Pune (-8%). IN the Mumbai Metro Region, the largest real estate market in the country, sales declined 3% sequentially.
It was only in Delhi-NCR, where home sales grew q-o-q by 6% to 16,550 units. However, due to a steady fall in sales over the past two years, the market in Delhi-NCR has shrunk considerably and is now featured at 5th spot in the pecking order.
Prices, however, continue to rise. Homes in the national capital region of Delhi (NCR) and Mumbai Metro Region (MMR) have become costlier by half over the last five years. In NCR, a market that had struggled for close to a decade pre-Covid from growing inventories and poor off-take, has witnessed massive demand for residential homes. The average price in the market, as result, has jumped 49% between H1, 2019, and H1, 2024. While in the country’s largest property market - MMR homes have become costlier by 48% during the same period.
According to analysts at Anarock, the bull run in residential sales across the top 7 cities tamed down marginally in the second quarter of 2024, on the backdrop of increasing property prices and a high base record of the previous quarter (Q1 2024).
“The quarterly decline seen in housing sales is essential because of the all-time high base considered in the previous quarter when more than 1.30 lakh units were sold. Most importantly, this drop is also due to the significant hike in property prices over the last one year, which in turn has prompted many investors to take a breather,” says Anuj Puri, Chairman, Anarock Group.