Property Prices in India’s IT Clusters are Rising by About 30%
In the past three years, property prices in India’s tech-centric areas such as Bangalore’s Whitefield, Hyderabad’s HiTech city districts such as Gachibowlli, and Pune’s Gondapur, have seen a sharp increase in the value of their residential properties. All three of these areas were at the top of the list of the micro residential markets with the highest increases in property prices from October 2023 to October 2020.
Gachibowli’s average residential price at the end of October 2023 stood at ₹ 6,355 per sq. ft. In the same period of 2020, the average price in this locality was ₹ 4,790 per square foot, according to data from Anarock Research, a real estate consultancy firm. Kondapur saw an average price increase of 31% in this period, while Bengaluru’s Whitefield came in third with a price increase of 29% in the same period. Hyderabad has a higher scope for price appreciation because the city’s average prices were lower in the period before COVID-19 compared to Bengaluru’s IT hubs. At 10M 2023, the average prices in the key micro markets in Hyderabad are almost on par with Bengaluru housing hotspots.
The upturn in property prices is a far cry from what we saw in 2020 when prices stagnated due to a lack of demand and an overhang of inventory, Anarock says. Until the pandemic hit in 2020, average property prices were range-bound. The pandemic has changed the dynamics of the industry. The recent festive season saw a surge in registrations in key markets, with a 30% increase in Mumbai. “Except for discounts, 2020 was one of the most price-stagnating years and a year that most developers would rather forget,” Thakur says. In 2023, supported by robust demand, housing sales in the top 7 cities reached a new peak, with sales surpassing the previous peak in 2014 by 36% in the 3rd quarter of 2023. In the top 7 cities, as of 3Q20, the total number of units sold was 1.2 lakh. In the same quarter in 2022, there were 88,230 units sold.
In addition to good demand, rising input prices also forced developers to increase the price. Developers are confident that the price increase will be passed on to the buyers. Property prices have been on the rise in the last couple of years due to a variety of factors such as increasing input and construction cost, increasing land prices, increased demand, etc. In addition, there has been a shift in the preferences of homebuyers towards bigger homes with better amenities. This has contributed to the upward trend of property prices. “The industry has been able to absorb the higher costs and demand is still high,” says Ravi Agarwal, Co-founder & Managing Director of Signature Global.
