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Housing prices increase by 7% in 2022, says new report

Increase in cost of construction coupled with pent up demand resulted in an appreciation of housing prices by an average 7 per cent during the last year, according to data.

The average housing prices increased 7% last year across eight major cities to Rs 6,700 – 6,900 per square feet as compared with the 2021 calendar year.

Gurugram witnesses 13% appreciation, highest amongst the top cities. The rise in prices of residential properties, however, did not impact sales during 2022 because of huge pent-up demand from the previous two years (2020 and 2021), which saw muted customer demand because of the COVID-19 pandemic.

“Housing prices remained by and large stable during the 2016-21 period. The year 2022 saw an appreciation in prices as the rates of key construction materials increased because of global headwinds like the Russia-Ukraine war. Strong revival in demand for both under-construction and ready to move in units also played a role in modest single digit increase in prices,” said Vikas Wadhawan, Group CFO,

“With the increase in the overall construction cost, builders were forced to raise the basic selling price (BSP) of apartments,” Wadhawan said.

Bengaluru and Delhi-NCR, both, witnessed a 9 per cent growth in prices, followed by Pune 8 per cent. Ahmedabad and Kolkata saw 7 per cent appreciation each in housing prices.

According to the data, the housing prices in Ahmedabad went up by an average 7 per cent year-on-year in 2022 to Rs 3,600-3,800 per square feet. Southern markets continue to rise wherein Bengaluru, the rates appreciated 9 per cent to 6,000-6,200 per square feet. Similarly, Chennai also grew by close to 5 per cent to 5,600-5,800 per square feet. Since Hyderabad has already seen high double-digit growth in the last few years, the market seems to be seeing some plateau in terms of growth rate. Although the realty prices continue to rise in the city of Nawabs and grew by about 4 per cent to Rs 6,100-6,300 per square feet.

“The residential prices have spiked up significantly in key micro markets of Gurugram, Hyderabad, and Bengaluru where we also see a premium being put on the little available (only 21% of the total unsold stock) but much in demand ready-to-move-in segment. Also there is a lot of NRI interest in the market owing to the weakening of the rupee,” said Ankita Sood, Head of Research,

In Delhi NCR, the prices of residential properties rose 9 per cent to Rs 4,800-5,000 per square feet. Among two major markets of Delhi-NCR, Gurugram saw a surge of 13 per cent to Rs 7,000-7,200 per square feet while Noida witnessed a growth of 7 per cent to Rs. 5,400-5,600 per square feet.

“We anticipate that property prices will continue to move up in the close range in 2023 with quality products attracting a further premium,” added Sood.

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