Throughout history, Delhi has been the epicenter of real estate activity in India. Nevertheless, property prices have increased at an unprecedented rate in recent times. The rising expenses aren’t just numbers,they also reflect the aspirations, challenges, and desires of numerous individuals who want to settle in the city.
Realizing the Reality of the Upsurge in Property Prices
Delhi’s property prices have been steadily increasing over the last decade. In the past five years, the average property price in Delhi has risen by roughly 7-10% per year, as per data from the National Housing Bank. The average cost per square foot in high-end districts like South Delhi was between 18,000 – 2500. These figures are on the rise, with a range of 25,000 to 35,000 per square foot by 2025.
Factors Driving the Price Boom:
- Limited Land Availability.
Due to the location’s tight space, property prices in Delhi have surged.With the city almost fully populated, there is little land available for new development to develop on. The tight supply and increasing demand lead to higher prices.
- Infrastructure Development.
Metro expansions, expressways (infrastructure), and flyovers have made certain areas in the city more easily accessible and desirable. Property prices in the peripheral regions of Dwarka and Rohini have risen due to increased demand.
- Economic Growth and Urbanization.
As India’s economy expands, the urban population also increases. The fact that Delhi is an important economic hub means that individuals from across the nation come to visit. Urbanization leads to an unrelenting demand for housing, which in turn drives up property prices.
- Investment Opportunities
Real estate in Delhi is considered to be a lucrative investment opportunity.The demand-supply gap has been widened by the constant appreciation in property values, which attracts both local and global investors.
The Impact of Economic Stability on Homebuyer
- Affordability Crisis.
Middle-class families are now far from obtaining homeownership due to the significant increase in property prices. Anarock Property Consultants report indicates that the affordability index for Delhi has deteriorated, with households needing over 15 years to afford a standard-sized home. This is according to experts.
- Shift to Peripheral Areas.
Due to financial constraints, a significant number of homebuyers are now searching for properties in the city center, particularly in areas like Greater Noida, Ghaziabad, and Gurugram. These areas are relatively cheap, but they come with their own challenges, such as longer travel times and less developed infrastructure.
- Enhanced Loan Burden
Rise in property prices leads to bigger home loans, which means more borrowing is necessary due the higher monthly interest payments.
Here's a comparative overview of property registrations in Delhi and Mumbai over recent years:
|
Year |
Delhi Property Registration |
Mumbai Property Registration |
|
2019 |
115,293 |
48,654 |
|
2020 |
73,77 |
46,386 |
|
2021 |
123,862 |
77,677 |
|
2022 |
134,827 |
74,943 |
|
2023 |
N/A |
126,907 |
|
2024 |
N/A |
141,202 |
Delhi vs Mumbai (2019-2020): property registrations in Delhi were consistently more significant than those in Mumbai (2019-2022). Approximately 80% more registrations were recorded in Delhi than in Mumbai by 2022.
COVID Impact ( 2020):Both cities' property transactions experienced a decrease due to COVID- 19 during the Pandemic Impact (2020), with Delhi experiencing progressively more drops.
Recovery and Growth (2021-2022): Property sales in both cities bounced back after the outbreak.There was a 68% rise in registrations in Delhi in 2021 and 9% in the same year in 2020.The year 2021 saw a significant increase in Mumbai's growth, while it experienced regress in 2022.
Mumbai Data of 2023: 2023. Mumbai's real estate market witnessed a 4% increase in sales in 2023, with 127,139 transactions completed.
The data demonstrates the fluctuation of property transactions in India's major cities, reflecting changing market conditions and buyer attitudes over time. This is particularly noteworthy.
The Perspective of Investors
Those in the real estate industry are handling this intricate terrain by:
Boom of Luxury Segments:
With higher profit margins, developers are focusing on luxury and ultra-luxury projects to take advantage of the demand.
Managing Unsold Inventory:
Some developers are offering incentives to lure potential buyers into existing unsold units, as part of an ongoing effort to clear the market.
Strategic New Launches:
The carefully planned launch of new projects is concentrated on areas and segments with high demand.
Future Foresight
The real estate market is expected to remain strong, but analysts predict that the significant growth in 2024 may not be permanent.
Expect more projects to be launched by developers in 2025, particularly in under-supplied markets like NCR and Chennai.
Larger, bigger houses are predicted to maintain the demand for luxury properties.
With inputs from agencies
Image Source: Multiple agencies
*The views expressed are personal to the author and do not reflect the platform's opinion of the same.
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