Delhi-NCR (National Capital Region) and MMR (Mumbai Metropolitan Region), India’s two biggest real estate markets, have seen an amazing boom in the last five years, which no one saw coming. Based on a study from the real estate consulting company Anarock, the average price of a home in both places went through the roof by 49% between the first half of 2019 and the first half of 2024.
Prices went up from Rs 4,565 per sq ft in NCR to Rs 6,800 per sq ft over the next five years. In MMR, prices went up from Rs 10,610 per sq ft to Rs 15,650 per sq ft. Rising building costs and high buyer desire are both to blame for this price increase.
Unexpected Effects of the Pandemic
The COVID-19 outbreak increased demand, which caused sales to go through the roof.
At first, developers used discounts and special deals to get people to buy, but as demand kept going up, prices were slowly raised.
“The COVID-19 pandemic was great for these two housing markets because it saw demand soar to all-time highs.” At first, makers used deals and free stuff to get people to buy, but as demand rose, they slowly raised average prices. In a note, Anarock said, “Strong sales helped unsold inventory go down during the period, especially in NCR.”
A Silver Lining in the Decline in Inventory
Strong sales activity greatly decreased the amount of unsold goods, especially in NCR.
The number of unsold units in NCR dropped by a huge 52%, from about 1.82 lakh units in the first half of 2019 to 86,900 units in the first half of 2024.
This means that the inventory excess will get much better, going from 44 months in H1 2019 to a healthier 16 months in H1 2024.
Cutting off fresh supplies on purpose was a big part of how the area got rid of its stock. Between the first half of 2019 and the first half of 2024, only 1.72 lakh units were released in NCR.
Anuj Puri, Chairman of ANAROCK Group, said, “In a strange way, the pandemic was a true blessing for the National Capital Region.” “The region used to be known for having a lot of unsold goods because of speculative demand and supply, but in the last five years, that number has dropped by over 52%.” It’s interesting that the NCR inventory surplus has gone down from 44 months in H1 2019 to 16 months in H1 2024.
Only in the past year, the prices of high-end homes in Mumbai have gone up 11.5%, putting the city third in the world. In the past year, Delhi’s prime home prices have gone up by 10.5%, putting it in fifth place on Knight Frank’s prime global cities index, which ranks cities by the percentage change in real estate prices each year.
“There has been a strong demand for homes all over the world, but the Asia-Pacific, Europe, Middle East, and Africa gateway markets have been at the forefront of this trend.” Like other places in this area, Mumbai and Delhi moved up on the top global cities measure, which was supported by strong sales growth. Knight Frank said in a recent study, “We expect sales momentum to stay stable over the next few quarters as economic corridors are likely to stay the same.”
