Premium Housing Price Rise Continues in Mumbai, Bengaluru, Delhi-NCR: Savills    

December 23, 2023: The premium residential market in major cities is seeing notable price appreciation, led by Gurugram with rise up to 45% followed by NOIDA, according to the latest report by Savills India, a global property consulting firm. While a variety of factors is driving this confidence, the continued price movement serves as evidence of a strong demand base, reflecting the robust sentiment in the market.

Completed projects in most of these cities have witnessed higher appreciation in capital values as compared to under-construction projects. This preference could be influenced by factors such as reduced uncertainty, immediate availability for use, and the ability to assess the actual quality and features of the property. As the residential market gains momentum and capital values experience a surge in recent months, buyers are motivated to make purchasing decisions, anticipating a continued strengthening of property prices. 

This sentiment is further supported by the recent decision of the Reserve Bank of India’s Monetary Policy Committee to maintain interest rates unchanged for a fifth consecutive time. This strategic move is anticipated to provide a significant boost to consumption in the residential segment, encouraging increased investment and activity in the residential market.

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

Price trends

Capital Values TrendYOY Increase as of Dec 2023
City	Completed Developments	Under-construction
Delhi	10%-31%	NA
Gurugram	28%-45%	12%-45%
NOIDA	27%-36%	23%-47%
Mumbai	1%-25%	2%-6%
Bengaluru	2.2% – 3.4%	1.5%-5.3%
Source: Savills India Research

Mumbai

• Mumbai witnessed an average 9% YOY rise in capital values for completed properties while a 4% YOY increase for under-construction properties.
• The micromarkets of Central Mumbai and Navi Mumbai witnessed a significant increase of 12%-25% YOY in capital values on account of newer completions commanding higher prices because of better specifications than the existing projects 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, Central Mumbai and Western Suburbs Prime has risen.

Bengaluru

• East Bengaluru saw the highest capital value appreciation in under-construction projects at 5.3%, driven by new projects with higher specifications. Meanwhile, North Bengaluru recorded a similar growth of 5.1% over the previous year.
• Under-construction projects saw a relatively higher growth at 3.9% YOY while completed projects witnessed about 3.0% YOY increase. 
• In Central, East and North Bengaluru, completed projects have witnessed an average YOY growth between 3% to 3.5%.

Delhi

• The city overall witnessed an increase of 18% YOY in the average capital value of luxury floors. 
• South-East Delhi remains the top micromarket with the highest price appreciation of 31% on an annual basis for luxury floors, followed by the South-West & South Central micromarkets which registered a YOY growth of 24% & 15% respectively. 
• The average capital values of residential plots witnessed   YOY growth of 23% at city level.

Gurugram

• The average capital values of completed and under-construction properties peak over the last 5 years with 36% and 25% YOY growth registered at city level respectively.  
• Both categories, under-construction as well as completed properties saw a notable increase in the average capital value between 12% to 45% YOY.
• New Gurugram & Dwarka Expressway were the top performing micromarkets with an annual growth of 45% and 21% respectively in average capital values of under construction properties. 
• Golf Course Road and GCER & SPR registered the highest average capital value appreciation for ready-to-move properties with a YOY increase of 45% and 39%, respectively.

NOIDA

• Average Capital values of completed and under-construction properties in NOIDA witnessed a significant YOY increase of 32% & 31% respectively.
• With 47% YOY growth, sector 150 micromarket witnessed the highest growth in capital value for under-construction properties. 
• NOIDA Others with 36% YOY increase, remains the top performing micromarket with highest appreciation in capital values for completed properties.

Rental trends

Rental Values Trend
City	YOY Increase as of Dec 2023
Delhi	20%-35%
Gurugram	18%-36%
NOIDA	1%-7%
Mumbai	2% – 41%
Bengaluru	4.3% – 6.9%
Source: Savills India Research

Mumbai

• Mumbai witnessed an increase of 19% YOY in average rental values as demand for leasing larger homes with better amenities gained momentum. 
• The commencement of metro line 2A and 7 between Dahisar and Andheri has favourably impacted the demand for rental properties, especially in the micromarket of Western Suburbs Others. The market witnessed significant demand for rental properties in Kandivali and Borivali locations from student population commuting by metro to colleges in Andheri and Vile Parle locations, hence leading to an 8% YOY rise in rental values.

Bengaluru

• While average rents at city level grew by 5.8% YOY, South and North Bengaluru saw the highest rental growth of 6-7% YOY in premium residential developments. 
• The rental market for premium housing in key localities like MG Road, Indira Nagar, Koramangala, etc in Central Bengaluru remains robust, with rents that are significantly higher than the average rents in the other micro-markets. 

Delhi

• The rental values increased by 26% YOY in 2023.
• Central 1 micromarket witnessed the highest annual growth in rentals at 35% followed by the South East and South Central micromarkets which observed 25% YOY increase.

Gurugram

• Average rentals witnessed an increase of 27% YOY across all markets.
• Dwarka Expressway and Golf Course Road saw the highest rise in rentals with 36% & 30% YOY growth, respectively. 

NOIDA

• NOIDA others micromarket with 7% YOY growth, saw the maximum hike in rentals in 2023. 

New launches across key cities:

• With approximately 9,000 luxury units, new launches in Gurugram increased more than 2X in 2023 
• New launches of luxury units in NOIDA also more than doubled with infusion of approximately 2,000 units in 2023.
• With 5,898 units launched in 2023 in the premium segment, Bengaluru saw a 45.5% YOY growth. 

Arvind Nandan, Managing Director, Research & Consulting, Savills India said, “As we step into 2024, the outlook for the premium to luxury residential segment in key urban hubs like NCR and Mumbai remains exceptionally promising. The doubling of new launches in Gurugram and NOIDA reflects a growing appetite for luxury residences. This surge not only underscores the resilience of the market but also signifies a growing demand for upscale living experiences.”