Bengaluru, Mumbai and NCR have found a place in the top 10 best performing Asia-Pacific residential markets in terms of annual price growth in H2 2023. Registering a price growth of 7.1% YoY in H2 2023, Bengaluru was ranked 8th on the Asia-Pacific Residential Review and Mumbai was ranked 9th, witnessing a YoY growth of 7%.
NCR, another key residential market, was ranked 11th with a price growth of 6% YoY in the period. Mumbai, NCR and Bengaluru constitute 60% of the total sales volume across Indian markets in 2023, as per Knight Frank’s Asia-Pacific Residential Review Index for H2 2023.
Bengaluru is gaining interest from non-city centric developers leading to a significant 24% surge in the number of launches in the city during H2 2023. The city recorded sales of 27,799 units in H2 2023. The average price in the city is recorded at ₹5,900 per sq ft ( ₹63,508 per sq m).
Mumbai saw a significant improvement in sales in H2 2023 majorly due to heightened demand during festive periods like Navratri, Dussehra, and Diwali. The city recorded sales of 46,073 units in H2 2023. The average price in the city is recorded at ₹7,883 per sq ft ( ₹84,849 per sq m).
The average price in NCR is recorded at ₹4,579 per sq ft ( ₹51,226 per sq m) and witnessed sales of 29,888 units in H2 2023.
According to the Asia-Pacific Residential Review Index for H2 2023, 21 out of 25 Asia-Pacific (APAC) cities have recorded positive annual price growth with Singapore ranked as the best-performing Asia-Pacific market with 13.7% year-on-year (YoY) growth.
The Asia-Pacific Residential Review is an investor focused report which provides an in-depth look at the performance of the mainstream residential markets across the region.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “In 2023, residential property demand in India’s major cities has surged to its highest level in a decade, despite the increase in mortgage rates and property prices. With significant tailwinds such as the expected reduction in interest rates and relatively strong economic growth, residential demand is anticipated to sustain momentum in 2024.”
Globally, the Hong Kong residential market ranks last in the index and is facing challenges like weak market sentiment, high-interest rates, and a substantial inventory of unsold completed new flats. Elevated mortgage rates are impacting home buyers’ affordability, leading them to take a more cautious approach.
Kevin Coppel, managing director at Knight Frank Asia-Pacific, said: “The residential market experienced a surge in the past six months, following the FED’s decision to pause rate hikes, which encouraged potential buyers who had been waiting on the sidelines to make purchasing decisions. Ongoing constraints on the supply side, including input costs, labor shortages and construction delays, have played a role in supporting prices in numerous cities across the Asia-Pacific region.”
Notable performers such as Singapore, Sydney, Brisbane, Perth, Manila, Delhi, and Bengaluru have benefited from factors like the wealth effect, demand exceeding supply, and optimistic economic growth prospects, he said.