Prices in premium markets of top 3 cities continue growth streak: Savills India

July 1, 2024: The premium residential market in major cities is seeing notable price appreciation, led by Gurugram with up to 53% increase followed by NOIDA, according to the latest findings by Savills India, a global property consulting firm. The second home location, North Goa also witnessed a steep rise of 28% in villa prices over the year owing to rise in ‘work from anywhere’ or remote working and relatively high rental yields. 

The under-construction projects in the top 3 cities have witnessed higher price appreciation up to 30% over the year compared to ready properties as new launches offered newer amenities and configurations. The continued price movement indicates strong demand in the premium housing market.

The heightened demand is further supported by the RBI that maintained interest rates for the sixth consecutive time which is expected to add momentum to the residential market.

The key trends these cities witnessed through the year:

Price trends:

Advertisement

Mumbai

• The rise in capital values for under-construction properties in Mumbai is sharper than ready properties that saw a 3% YOY rise compared to a 5% YOY increase for under-construction properties.
• The micromarkets of Central Mumbai and Western Suburbs (Others) witnessed a significant increase of 12%-21% YOY in capital values on account of new launches at prices higher than the existing market average.
• The market witnessed significant traction in demand for the luxury segment. Larger spaces in bungalows and prime residences were preferred due to the increasing trend of hybrid working, especially by professionals in the financial services industry as well as in legal domain.

Bengaluru

• Bengaluru’s premium residential market witnessed a growth of 5-6% YOY in capital values over the year. The under-construction projects saw higher growth averaging 7.2% YOY compared to about 5.2% YOY increase in newly completed projects as new projects were being launched at higher prices along with strong demand.
• Central Bengaluru has witnessed the highest growth in capital values in completed projects at 7.5% followed by 6.2% in East Bengaluru. The completion of the new metro route in Eastern Bengaluru and strong demand from HNIs in the Central Bengaluru have been the major driving factors for capital appreciation in these markets.  

Delhi

• The city overall witnessed an increase of 16% YOY in the average capital value of luxury floors. 
• The micromarket of South-East Delhi witnessed the highest price appreciation of 27% on an annual basis for luxury floors. This is followed by the South-West micromarket which registered a YOY growth of 21%. 
• The average capital values of residential plots witnessed a YOY growth of 25% at the city level. The South-Central and South-West micromarkets led this trend, with both recording the highest YOY growth rates at 29%

Gurugram

• The average capital values of completed and under-construction properties hit a fresh peak with 37% and 30% YOY growth registered at city level respectively.  
• New Gurugram & Dwarka Expressway were the top performing micromarkets with an annual growth of 53% and 34% respectively in average capital values of under construction properties.
• The city overall witnessed an increase of 26% YOY in the average capital value of residential plots. The Dwarka Expressway micromarket registered the highest price growth, with a 43% YOY increase.

NOIDA

• Average Capital values of completed and under-construction properties in NOIDA witnessed a significant YOY increase of 30% & 29% respectively.
• With 43% YOY growth, sector 150 micromarket witnessed the highest growth in capital value for under-construction properties. 

North Goa

• Average capital values for villas in North Goa witnessed a steep rise of 28% YOY. This increase in prices is attributed to its rising popularity among homebuyers as a second home location owing to high rental yields, a growing preference for gated villas and a demographic shift towards younger, lifestyle-focused buyers.
• The market is witnessing a trend of young professionals, especially from major cities like Mumbai, Delhi and Bengaluru, moving to Goa. These professionals often work in creative fields or are digital nomads seeking a better work-life balance.
• Homebuyers preferred gated villas along the coastal belt locations, such as Anjuna, Arpora, Baga, Calangute, Candolim and Vagator.
• Due to rising land prices, the supply of villas in North Goa has seen a tremendous shift. The standard sizes of villas have shrunk to almost half from 5,400 sq ft. to 2,700 sq ft. over the past five years.

Rental trends

Mumbai

• All micromarkets witnessed an increase in rental values, estimated in the range of 3%-8% YOY. The rise in rental values can be partly attributed to pent-up demand for rental properties due to redevelopment of dilapidated buildings in the city.
• The market gained momentum as end-users increasingly considered leasing larger homes in projects with amenities. 
• Properties located near metro stations witnessed a substantial increase in rental values. The convenience of a quick and reliable commute to major business hubs and entertainment districts is highly sought after by homebuyers.

Bengaluru

• South and North Bengaluru saw a significant growth of ~3% YOY in rentals in premium residential developments. ​Similarly, East and Central Bengaluru recorded a growth of ~2% YOY in premium properties.

Delhi

• The rental values increased by 31% YOY in H1 2024 at city level.
• South-Central micromarket witnessed the highest annual growth in rentals at 38% followed by the Central 1 micromarket which observed 36% YOY increase.

Gurugram

• Average rentals witnessed an increase of 18% YOY at city level.
• Dwarka Expressway and Golf Course Road saw the highest rise in rentals with 28% & 19% YOY growth, respectively. 

NOIDA

• Sector 150 and NOIDA Others micromarkets with 12% YOY growth, saw the maximum hike in rentals in H1 2024. 

New launches across key cities:

• Luxury unit launches in Delhi increased over 4X, with 1,300 new units launched in H1 2024.
• With approximately 9,500 luxury units, new launches in Gurugram increased 2X in H1 2024 
• New launches of luxury units in NOIDA saw a significant increase, with approximately 2,200  units added in H1 2024.
• With 5,632 units launched in H1 2024 in the premium segment, Bengaluru saw a 156% YOY growth. East Bengaluru accounted for 55% of the new launches while North Bengaluru contributed 23%. 

Shveta Jain, Managing Director, Residential Services, Savills India said, “In H1 2024, the buyer sentiment was upbeat, with investor interest gravitated towards new launches, while end-users sought ready-to-move-in properties. Older developments in grade A corridors witnessed increased demand from both buyers and tenants. The velocity of sales was better for villas and apartments with large balconies and green patches. The 4-bedroom format also garnered more attention in the luxury segment, applicable to both primary and secondary markets. The increase in new launches in Gurugram and Delhi also reflects a growing appetite for luxury residences. Interestingly, discerning buyers also sought green buildings, reflecting a growing demand for upscale, sustainable living beyond traditional amenities.”