Housing Prices in NCR and MMR Soar by 49% in 5 Years, Unsold Inventory Plunges: ANAROCK

In a remarkable turn of events, the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) have witnessed unprecedented growth in their housing markets over the past five years, according to the latest research data from real estate consultant ANAROCK. The report reveals that average residential prices in these regions have skyrocketed by 49% and 48%, respectively, between H1 2019 and H1 2024.

In the NCR, the average residential price has jumped from ₹4,565 per square feet in H1 2019 to ₹6,800 per square feet in H1 2024, a staggering 49% increase. Similarly, in the MMR, the average residential price has appreciated from ₹10,610 per square feet in H1 2019 to ₹15,650 per square feet in H1 2024, a 48% rise. This remarkable surge in prices is attributed to a combination of factors, including steep hikes in construction costs and healthy sales.

The pandemic, which initially caused a slowdown in the real estate sector, surprisingly turned out to be a blessing in disguise for these two regions. As people began to prioritize owning a home over renting, demand for housing skyrocketed, leading to a sharp decline in unsold inventory. In the NCR, the inventory overhang has reduced dramatically, from approximately 1.82 lakh units at the end of H1 2019 to around 86,900 units by the end of H1 2024, a decline of over 52%. The inventory overhang has also decreased significantly, from 44 months in H1 2019 to just 16 months in H1 2024.

Conscious curtailment of fresh supply was a major factor in clearing the inventory in the NCR, with only about 1.72 lakh units launched between H1 2019 and H1 2024. In contrast, the MMR has seen a substantial increase in new launches, with over 5.26 lakh units launched in the same period, helping to reduce its unsold stock by 13%. The inventory overhang in the MMR has also decreased, from 34 months in H1 2019 to 14 months in H1 2024.

According to ANAROCK Group Chairman Anuj Puri, the pandemic was a game-changer for the NCR, which was previously infamous for its high unsold inventory. “The COVID-19 pandemic was an undisguised blessing for the National Capital Region,” he said. “Initially, developers induced sales with offers and freebies, but with demand heading north, they gradually increased average prices. Strong sales helped unsold inventory to decline in the period, especially in NCR.”

The report highlights the remarkable turnaround in the housing markets of these two regions, which had previously seen stagnant prices and high unsold inventory. The surge in prices and decline in inventory overhang are a testament to the resilience of the Indian real estate sector and its ability to adapt to changing circumstances.

Historical Context:

The Indian real estate sector has faced numerous challenges in recent years, including a slowdown in growth, high unsold inventory, and stagnant prices. The COVID-19 pandemic, which began in 2020, had a significant impact on the sector, with many developers struggling to sell their properties and maintain cash flow. However, as the pandemic progressed, the Indian government implemented various measures to stimulate the economy, including reducing interest rates and increasing infrastructure spending. This, combined with the shift in consumer behavior towards owning a home over renting, led to a surge in demand for housing in the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR).

Key Points:

• The average residential price in the NCR has increased by 49% between H1 2019 and H1 2024, from ₹4,565 per square feet to ₹6,800 per square feet. • The average residential price in the MMR has increased by 48% between H1 2019 and H1 2024, from ₹10,610 per square feet to ₹15,650 per square feet. • The pandemic led to a sharp decline in unsold inventory in both regions, with the NCR seeing a decline of over 52% and the MMR seeing a decline of 13%. • The inventory overhang in the NCR has decreased from 44 months in H1 2019 to 16 months in H1 2024, while the MMR has seen a decrease from 34 months to 14 months. • The NCR has seen a conscious curtailment of fresh supply, with only about 1.72 lakh units launched between H1 2019 and H1 2024, while the MMR has seen a substantial increase in new launches, with over 5.26 lakh units launched in the same period. • The report highlights the remarkable turnaround in the housing markets of the NCR and MMR, which had previously seen stagnant prices and high unsold inventory. • The surge in prices and decline in inventory overhang are a testament to the resilience of the Indian real estate sector and its ability to adapt to changing circumstances.

Summary in Bullet Points:

• Housing prices in the NCR and MMR have increased by 49% and 48%, respectively, between H1 2019 and H1 2024. • Unsold inventory has declined significantly in both regions, with the NCR seeing a decline of over 52% and the MMR seeing a decline of 13%. • The pandemic led to a shift in consumer behavior towards owning a home over renting, driving demand for housing in the NCR and MMR. • The NCR has seen a conscious curtailment of fresh supply, while the MMR has seen a substantial increase in new launches. • The report highlights the remarkable turnaround in the housing markets of the NCR and MMR, which had previously seen stagnant prices and high unsold inventory. • The surge in prices and decline in inventory overhang are a testament to the resilience of the Indian real estate sector and its ability to adapt to changing circumstances.