Premium residential prices up 3-18% Y-o-Y in Mumbai, Bengaluru, Delhi-NCR in H1 2023: Savills India Report

July 14, 2023: The premium residential market in the major cities is seeing notable price appreciation in the range of 3-18% on an average compared to H1 2022, according to the latest report by Savills India. While a variety of factors are driving this confidence, the continued price movement serves as evidence of a strong demand base, reflecting the robust fundamentals of India’s economic growth.

Under-construction projects in these cities have witnessed higher appreciation in capital values as compared to completed projects. This reflects buyers’ preference for new launches with better amenities and spacious units. Additionally, with the residential market picking pace and capital values accelerating in the recent months, buyers are prompted to make buying decisions as they anticipate further strengthening of prices. 

The report further delves into the key trends these cities witnessed through the year –

Price trends

Mumbai

• Mumbai witnessed an average 8% YOY rise in capital values for completed as well as under-construction properties.
• The micro-markets of Central Mumbai, Navi Mumbai and Thane witnessed a significant increase of 10%-22% YOY in capital values on account of newer completions commanding higher prices because of better specifications than the existing buildings in the market.
• Buyers are preferring larger homes and are also looking to upgrade from existing smaller apartments, hence the demand for large apartments and penthouses in South Mumbai and Central Mumbai has risen.

Bengaluru

• The capital values of both completed and under-construction premium housing projects increased in the range of 3-4.5% YOY in different micro markets.
• South Bengaluru saw a similar increase in the prices of under-constructed and newly completed projects of about 4-5% YOY in H1 2023.
• Meanwhile, under-construction projects in North Bengaluru registered the highest YOY increase in premium housing prices at 7-8% in H1 2023. 

Delhi

• The city witnessed an average increase of 11% YOY in the capital value of luxury floors. 
• South-East Delhi stands out with the highest price appreciation of 15% on an annual basis, followed by the South-West & Central 2 micro-markets which registered a YOY growth of 14% & 13% respectively. 
• The capital values of residential plots plateaued in H1 2023 for most of the micro-markets, except South-East Delhi which witnessed a YOY growth of 10%. 

Gurugram

• The capital values for completed and under-construction properties have significantly escalated in the range of 11% to 40% YOY across all micro-markets. 
• Both categories – under-construction as well as completed properties saw a notable increase in the capital values at 27% YOY and 23% YOY respectively.
• New Gurugram with a YOY increase of 40% witnessed the highest rise in capital values of under construction properties during H1 2023.
• GCER & SPR registered the highest capital value appreciation for ready-to-move properties with a YOY increase of 35%.

NOIDA

• Sector 150 micro-market with 28% YOY growth witnessed the highest growth in capital values for under-construction proprieties.
• NOIDA Others with 24% YOY increase, bags the top position with highest appreciation in capital values for completed properties.

Rental trends

Mumbai

• During H1 2023, Mumbai witnessed an increase of 18% YOY in average rental values as demand for leasing larger homes increased as a result of rise in hybrid work culture.
• All micro-markets witnessed an increase in rental values, estimated in the range of 4%-50%. The micro-market of Central Mumbai recorded the maximum increase of 50% YOY due to introduction of select new projects asking for higher rental values than the existing market average.

Bengaluru

• South and North Bengaluru saw a significant growth of 4% YOY in rentals in premium residential developments. 
• The rental market for premium housing in Central Bengaluru is robust, with rents that are significantly higher than the average rents in the other micro-markets. 

Delhi

• The rental values increased by 5% YOY in H1 2023.
• Central 1 micro-market witnessed the highest annual growth in rentals at 10% followed by the South-East micro-market which observed 8% YOY increase.

Gurugram

• Average rentals witnessed an increase of 28% YOY across all markets.
• GCER &SPR and Golf Course Road saw the highest rise in rentals with 33% & 31% YOY growth, respectively. 

NOIDA

• NOIDA others micro-markets with 19% YOY saw the maximum hike in rentals in H1 202. This is followed by the NOIDA-Greater NOIDA Expressway with an 18% YOY increase in rentals in H1 2023.

New launches across key cities 

• New Launches of luxury units in Gurugram increased more than 3X in the H1 2023 to 4,910 units approximately.
• With 2,200 units launched in H1 2023 in the premium segment, Bengaluru saw a 30.3% YOY decline. 

Shveta Jain, Managing Director, Residential Services, Savills India said, “The premium residential market in key cities has witnessed remarkable momentum, leading to a significant appreciation in property values throughout the year. Recognising this demand, developers have responded with notable new launches in this category. With the buoyancy expected to prevail, the demand for premium properties is driven by both end buyers seeking long-term investments and upgrades to their current homes. Properties like villas, golf-facing developments, farmhouses, and independent homes continues to captivate buyers, further fuelling the market’s growth. The successful launches by grade A developers in NCR and Bengaluru stand as a testament to the enduring interest of buyers in the premium residential segment.”