improving demand from homebuyers, along with the optimism among developers to increase rates. The average per sq ft prices of residential properties in India posted a year-on-year growth of 7 per cent during the first quarter of 2022. The biggest annual growth was registered in Bangalore, at 7 per cent, followed by Pune, at 5 per cent and Mumbai, at 4 per cent. Meanwhile, the cities of Hyderabad and Chennai witnessed a price rise of 1 per cent, according to data published by property consultant Knight Frank India.
“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,” Shishir Baijal, chairman and managing director at Knight Frank India, said.
Nevertheless, some experts warn that this revival in housing market may be dampened as a result of price increases by realty developers. “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,” Sudhir Pai, chief executive at online Property marketplace Magicbricks, said. “We are in a sweet spot right now and any speculative hikes or prices going up in a sharp way may dampen the demand.”
His concerns are not without merit, since property developers have already announced plans to increase prices of unsold property currently under construction in order to cover soaring cost of raw material. Over the past year, prices of cement, steel, aluminium, PVC and other material have increased between 30 and 100 per cent.
