Real Estate prices have started moving upward across the country as improving demand has supported the optimism among developers to increase rates. The combination of revival in demand and rising cost pressure has resulted in housing prices moving higher as developers attempt to protect their margins.
All cities posted up to 7% year-on-year growth in per sq ft prices during the quarter ended March. Prices grew the most in Bengaluru at 7% on-year followed by Pune and Mumbai at 5% and 4% on-year, respectively. The lowest price rise of 1% was witnessed in Hyderabad and Chennai.
“While financial stress remains a significant factor for developers across markets, healthy and sustained homebuyer activity should pave the way for gradual price increases and enable them to tide over the rise in costs of critical inputs like cement and steel,” said Shishir Baijal, CMD, Knight Frank India.
“Demand is going up as indicated by rising enquiry levels and sales. Most of the price hikes are taking place because of revival in demand. We are hoping it will be more gradual and marginal from here on. We are in a sweet spot right now and any speculative hikes or prices going up in a sharp way may dampen the demand,” said Sudhir Pai, CEO, Magicbricks.