Rising property prices in India offer a clear indication of the country’s robust economic health. A recent sale of a flat in Gurugram, part of the National Capital Region (NCR), set a record for being the costliest Indian high-rise apartment, with a price tag of Rs 190 crores.
The apartment was sold at Rs 1.82 lakh per square foot, marking a significant surge in property values. Between 2018 and 2024, higher-value properties have seen an increase of 16% to 43%, highlighting a growing preference for premium real estate in India. Experts predict that this upward trend will continue, with home prices expected to rise by 6.5% in 2025.
Demand For High-Value Properties In Metropolitan Cities
The demand for high-value properties is largely concentrated in India’s metropolitan cities, especially around Delhi-NCR, Mumbai, Pune, Hyderabad, Bengaluru, Chennai, and Kolkata.
These cities, as major economic hubs, attract top talent, which drives the demand for premium real estate. As incomes rise, Indians are becoming more aspirational, looking to upgrade their living standards. Gated societies with enhanced security, common areas for children, and parks for elderly residents are becoming increasingly popular.
Real Estate Sales Surge in 2024
According to Global Commercial Real Estate Services, a real estate advisory firm, sales of high-value properties grew by 37.8% year-over-year (YoY) during the January-September 2024 period.
Notably, Delhi-NCR, Mumbai, Pune, Hyderabad, Bengaluru, Chennai, and Kolkata experienced an 11% YoY increase in average housing prices in the third quarter of 2024. Bengaluru led the charge, with an impressive 24% YoY increase during the same period.
Among these cities, the Mumbai Metropolitan Region (MMR) recorded the highest property sales in 2024, with around 1.5 lakh units sold. The Housing Price Index (HPI) prepared by the National Housing Bank (NHB) showed a 4.6% increase in Mumbai’s property sales in the first quarter of FY 2024 compared to the same period in FY 2023.
The HPI also indicates consistent growth in property prices in Delhi, Mumbai, and other metropolitan cities over the past few years.
Urbanization And Rising Disposable Income Fuel Growth
India’s rapidly growing urban population has contributed significantly to the surge in housing demand. As more people migrate to cities in search of better job opportunities, the demand for housing has increased, pushing property prices higher.
In parallel, rising economic growth has improved the purchasing power of the working population, enabling more people to afford better living standards. This upward economic trend has also spurred developers to create better-quality housing and infrastructure, thereby improving urban living conditions.
Easing Financing And Bank Support
The Reserve Bank of India (RBI) has kept interest rates relatively low in recent years to stimulate economic growth. Lower mortgage rates have made borrowing cheaper for homebuyers, further driving the demand for housing.
In addition, banks and financial institutions have made home loans more accessible, making it easier for buyers to purchase residential properties.
Real Estate Sector’s Role in Employment Generation
The rise in property prices has a ripple effect on employment and income opportunities, particularly in the construction and ancillary sectors. Real estate is one of India’s largest employment generators, contributing about 7.3% to the country’s GDP and providing 18% of national employment.
According to a joint report by ANAROCK and NAREDCO, the number of people employed in India’s real estate sector grew from 40 million in 2013 to 71 million in 2023, reflecting the sector’s rapid expansion.
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