5-Year Price Surge – Top 7 Cities See 45% Hike, Some Markets Over 90%

Micro-Markets See Significant Price Appreciation Amid New Supply

Mumbai / 26 August 2024: Residential prices have been rising significantly across cities in the last few years, amid buoyant demand and increased new supply. ANAROCK Research has analysed the price trends in the top 3 micro-markets of the top 7 cities, based on maximum new supply seen in the last 5 years.

Among the shortlisted localities, Bengaluru’s Bagaluru recorded the highest price appreciation of 90% between 2019 and H1 2024.

“With new supply of approx. 17,065 units in the period, the average residential prices at Bagaluru jumped up from INR 4,300 per sq. ft. in 2019 to approx. INR 8,151 per sq. ft. in H1 2024,” says Anuj Puri, Chairman – ANAROCK Group. “A deeper dive reveals that of the total new supply launched in this micro market since 2019, over 94% was in the price bracket of INR 40 lakh to INR 1.5 Cr – the mid and premium segments. The remaining 6% was in the luxury segment priced over Rs1.5 Cr. Tellingly, there was no new affordable supply in this locality.”

Hyderabad’s Kokapet came close behind with overall price appreciation of 89% in this period. The area saw approx. 12,920 units of new supply in the period, and prices rose from INR 4,750 per sq. ft. in 2019 to Rs 9,000 per sq. ft. in H1 2024. A whopping 52% of the new launch share was in the ultra-luxury category priced over Rs 2.5 Cr, followed by a cumulative 30% in the mid and premium segments. The remaining 19% supply was in the luxury price bracket of INR 1.5 – 2.5 Crore.

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Bengaluru’s Whitefield ranks 3^rd, recording an 80% rise in residential prices in the period. The area witnessed saw approx. 18,600 units launched between 2019 and H1 2024 – over 66% was in the mid and premium budget category, and the remaining 34% was in the luxury homes segment. Average prices here increased to Rs 8,600 per sq. ft. in H1 2024 from Rs 4,765 per sq. ft. in 2019.

Source: ANAROCK Research

“Housing price growth accelerated after the pandemic, particularly if we consider the last two years,” says Puri. “As per our data, the top 7 cities collectively saw over 44% of price appreciation in the last five years. At a city level, Hyderabad recorded the highest jump of 64% between 2019 and H1 2024, followed by Bengaluru with a 57% increase. The lowest price growth of 25% was seen in Kolkata. NCR and MMR both witnessed a 48% price appreciation each in this period.”

The commonly held notion that high new supply in a market tends to curtail price growth is not entirely true; many of these active residential micro-markets have seen significant price appreciation over the last five years. For instance, Greater Noida West in NCR – which has the 5^th highest supply in the region in last five years – saw a whopping 129% price appreciation.

Top 10 Micro-markets for New Supply – MMR’s Dombivli Leads

The past five years have seen a massive infusion of new supply across the top 7 cities – more than 16,32,650 units between 2019 and H1 2024. City-wise, MMR witnessed the highest supply with approx. 5,25,430 units in this period, followed by Pune with over 2,95,550 units. In terms of micro-markets, MMR’s Dombivli remained the most active market in this period, with the highest new supply.

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Source: ANAROCK Research

* Note: The report considers the top 3 most active localities in terms of maximum new supply b/w 2019 to H1 2024 in each of the top 7 cities