In 2024, property prices in India’s major cities are set to experience dynamic shifts – driven by economic recovery, rapid infrastructural developments, growing demands of work-from-office, and evolving buyer preferences. Notable price fluctuations are expected in cities like Mumbai, Delhi, and Bangalore, with increasing demand for residential and commercial spaces.
The Indian real estate market witnessed robust performance in 2023 and early 2024, buoyed by a resilient economy, favourable government policies, and increased consumer confidence. Key metropolitan areas have seen a surge in property transactions and prices. This blog explores predictions for property prices in major Indian cities for 2024-25, providing insights that can help homebuyers and investors navigate the market.
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Overall Market Outlook
Experts predict a more moderated national real estate market growth in FY 2024-25. ICRA and Colliers have provided valuable insights into the expected trends. While the market enjoyed a significant boost the previous year, 2024-25 will likely show a steadier pace.
ICRA projects a balanced market with potential price stabilisation, indicating a shift from the rapid price increases of 2023. Colliers highlights that infrastructural developments and economic recovery will continue to support the market.
Overall, the national real estate market is poised for a period of consolidation. Stable prices and a strategic shift in demand will set the stage for sustainable growth in 2024-25 and beyond.
Predictions for India’s Key Cities and Markets
The financial capital of the country, its seat of power, metros such as Bangalore, Chennai, Pune, & Hyderabad, and key markets such as Kerala are set to undergo price changes in 2024. Listed below are the predictions for these, for residential real estate.
(Sources: CBRE India, JLL India, Colliers)
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Mumbai
Recent Performance: In Q1 2024, Mumbai’s real estate market saw a substantial uptick, with residential prices increasing by 7% year-on-year. This growth was driven by demand for luxury and mid-segment properties and significant infrastructural developments such as the ongoing metro expansion and coastal road projects.
Predictions for 2024-25: For the remainder of 2024 and into 2025, property prices in Mumbai are expected to increase moderately by 5-8%. This growth will be sustained by continued infrastructure projects and an influx of new commercial spaces, enhancing the city’s attractiveness for residential and commercial investments.
Influencing Factors: Key factors include completing metro lines, new commercial hubs, and government initiatives to improve housing affordability. Additionally, the anticipated economic recovery will further bolster Mumbai’s real estate market demand.
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Delhi NCR
Recent Performance: In Q1 2024, Delhi NCR experienced stable yet positive growth, with residential property prices rising by 5%. The market benefitted from increased demand for affordable housing and developments in strategic locations near business hubs and IT corridors.
Predictions for 2024-25: Property prices in Delhi NCR are projected to grow by 4-7% over the year. This growth will be driven by ongoing and upcoming infrastructure projects such as the Regional Rapid Transit System (RRTS) and the development of smart cities in the region.
Influencing Factors: Significant factors include infrastructure upgrades, improved connectivity with surrounding regions, and government policies promoting affordable housing. The growth in IT and commercial sectors will also be crucial in driving demand.
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Bangalore
Recent Performance: Bangalore’s real estate market witnessed a remarkable 8% increase in property prices in Q1 2024, spurred by the city’s status as India’s largest IT and startup hub. High demand for residential spaces in Whitefield and Electronic City contributed to this growth.
Predictions for 2024-25: In 2024-25, Bangalore is expected to see property prices rise by 6-9%. This increase will be supported by the continued growth of tech companies, expansion of metro lines, and new residential projects targeting the growing middle and upper middle classes.
Influencing Factors: Key drivers include expanding the metro network, upcoming tech parks, and establishing new educational and healthcare institutions. The city’s thriving IT sector will significantly contribute to real estate demand.
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Chennai
Recent Performance: In Q1 2024, Chennai’s real estate market experienced a steady growth of 6%, driven by demand in both residential and commercial segments. The city’s strong industrial base and expanding IT sector have contributed to this trend.
Predictions for 2024-25: Property prices in Chennai are anticipated to increase by 5-7% over the year. Ongoing infrastructure projects, including the Chennai Metro Rail Phase II and various road expansions, will support this growth.
Influencing Factors: Significant factors include improved connectivity, industrial growth, and the development of new residential projects catering to the IT workforce. The city’s strategic location and economic diversity will continue to attract investments.
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Pune
Recent Performance: Pune saw a 7% increase in property prices in Q1 2024, with strong demand in residential areas such as Hinjewadi and Kharadi. The city’s reputation as one of the biggest educational and IT hubs of the country has bolstered its real estate market.
Predictions for 2024-25: This year, Pune is expected to see property prices rise by 6-8%. This growth will be driven by recurring demand in the IT sector, expansion of metro services, and new residential projects catering to the influx of professionals.
Influencing Factors: Key factors include infrastructural developments like the Pune Metro, new IT parks, and improved road connectivity. The city’s strong education sector and quality of life will further enhance its attractiveness.
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Hyderabad
Recent Performance: Hyderabad’s real estate market recorded an impressive 9% increase in Q1 2024, driven by the city’s booming IT sector and strategic infrastructural developments. Areas like Gachibowli and HITEC City saw significant demand.
Predictions for 2024-25: Property prices in Hyderabad are projected to rise by 7-10% in the year. Ongoing IT developments, the expansion of metro lines, and new commercial projects will fuel this growth.
Influencing Factors: Major factors include the city’s status as an IT hub, upcoming infrastructure projects like the Pharma City, and government initiatives to promote investment in the real estate sector. Hyderabad’s strategic location and business-friendly environment will continue to attract investments.
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Kerala
Recent Performance: Kerala’s real estate market saw a moderate growth of 4% in Q1 2024, with demand primarily driven by the NRIs and the tourism sector. Key cities like Kochi and Thiruvananthapuram experienced increased activity.
Predictions for 2024-25: Property prices in Kerala are expected to increase by 3-5% over the next year. Developing new residential projects, tourism infrastructure, and NRI investments will support this growth.
Influencing Factors: Key drivers include infrastructural improvements, the state’s focus on tourism, and government incentives for real estate investments. The influx of NRI money and the development of smart cities will also play crucial roles.
Factors Affecting Property Prices in India (2024-25)
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Interest Rate Trends
The level of interest rates is essential in influencing property prices. Changes in rates by the Reserve Bank of India (RBI) directly affects the borrowing costs for homebuyers and developers. Lower interest rates lead to increased demand for housing, as borrowing becomes cheaper; this can drive up property prices.
Conversely, higher interest rates may dampen demand, potentially stabilising or reducing property prices. The RBI’s monetary policy for 2024-25, aimed at controlling inflation and fostering economic growth, will be a significant factor in the real estate market’s performance.
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Economic Growth
India’s overall economic growth significantly influences the real estate market. Higher economic growth is expected to result in increased employment, higher disposable incomes, and improved consumer confidence – all boosting demand for residential and commercial properties.
India’s economic growth in 2024-25, supported by government initiatives and a strong focus on infrastructure development, is expected to impact the real estate sector positively. Continued growth in industries like IT, manufacturing, and services will further drive demand for real estate.
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Availability of New Projects
New residential and commercial project launches affect property prices by influencing supply. Increasing the number of new projects can lead to greater competition among developers, which might keep prices in check.
Conversely, a scarcity of new developments can lead to increased prices due to higher demand relative to supply. Introducing large-scale projects, smart city initiatives, and urban renewal programs in various cities across India will shape the real estate market’s landscape in 2024-25.
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Affordability
This remains an important factor for homebuyers, especially in urban and suburban areas where property prices can be significantly high. Government policies promoting affordable housing, such as subsidies and tax incentives, can make home ownership more accessible and stimulate demand.
If property prices rise too quickly, it could lead to affordability issues, limiting the market’s growth potential. In 2024-25, balancing affordability with quality and location will be essential for sustaining demand in the real estate sector.
Conclusion
Property price predictions for major Indian cities in 2024-25 indicate moderate growth. Mumbai, Delhi NCR, Bangalore, Chennai, Pune, Hyderabad, and Kerala expect varying price increases – driven by infrastructure development, economic growth, and evolving consumer preferences. While Mumbai and Hyderabad may see higher growth rates due to ongoing and upcoming projects, cities like Delhi NCR and Pune are anticipated to experience more stable yet positive trends.
When making real estate decisions, it is important to consider your needs and conduct thorough research. Each city has unique dynamics and factors influencing property prices, from local infrastructure projects to economic conditions. Homebuyers & investors should stay informed about market trends and leverage available data to make educated choices.
Consulting a professional real estate advisor is recommended for personalised guidance amidst the complexities of the India real estate market. The knowledge they possess can result in valuable perspectives and customised recommendations – ensuring your investments are in line with your financial objectives and lifestyle requirements.
FAQs
1. Will property prices continue to rise in 2024-25?
Yes, property prices will continue to rise moderately in 2024-25. While some increase is likely, stabilisation or even slight corrections are also possible in certain segments.
2. Which cities are expected to see the highest property price growth?
Cities expected to see the highest property price growth in 2024-25 are Mumbai, Delhi NCR, Bengaluru, Chennai, Pune, and Hyderabad.
3. What factors can influence property prices in 2024-25?
Factors that can influence property prices in 2024-25 are interest rate trends, economic growth, new project launches, and affordability concerns.
4. How can I make informed decisions about buying property in 2024-25?
You can make informed decisions about buying property in 2024-25, by considering factors such as your budget, preferred location, and property type. Consult a real estate advisor for personalised guidance that is customised to your unique requirements, budget, and financial outlook.
5. Are there any emerging trends in the Indian real estate market?
Emerging trends in the Indian real estate market are the rise of Tier II & III cities and growing focus on sustainable developments. These aspects may influence property markets in 2024-25 and beyond.
