Under-Construction Properties Record Price Appreciation

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    Under-construction properties have recorded about 55 percent price appreciation in the last one year, according to a January 3 report by Savills India, as published by Hindustan Times.

    Gurugram and Mumbai saw the highest surge in under-construction property values, with increases of up to 55% and 10%, respectively. Bengaluru and North Goa followed with price hikes of 25% and 16%, compared to the previous year.

    The report attributes the rise to strong demand and positive market sentiment, driven by new projects offering high-end amenities, quality specifications, and flexible, staggered payment plans. These factors have encouraged many buyers to invest in under-construction properties.

    While under-construction properties experienced notable appreciation, the report also indicated that completed properties have seen steady price increases across major cities, with an average rise of up to 25% in the last year.

    The ongoing price surge in the residential market, combined with rising capital values, has motivated many buyers to act quickly, anticipating further price growth. This sentiment has been further supported by the Reserve Bank of India’s Monetary Policy Committee’s recent decision to keep interest rates unchanged, bolstering buyer confidence.

    Shveta Jain, Managing Director of Residential Services at Savills India, explained that the surge in luxury home sales in 2024 is being driven by several factors, including economic growth and an increased appetite for exclusive, amenity-rich properties that align with modern lifestyles.

    She noted that the rise in new high-end launches and flexible payment options reflects evolving buyer preferences for quality and convenience, signaling the strong fundamentals of the luxury residential market.

    In Noida, rental appreciation was recorded at 12-22% year-over-year as of December 2022, according to the report. The capital values of both completed and under-construction properties in Noida saw an increase of 1%-24% year-over-year across various micro-markets.

    Notably, the Noida-Greater Noida Expressway and Noida Others micro-markets registered the highest capital value growth for completed properties, with a 24% increase.

    The Noida-Greater Noida Expressway micro-market also saw a significant 22% year-over-year rental growth in 2024. Meanwhile, the Noida Others and Sector 150 micro-markets recorded 16% and 12% increases, respectively, in average rental values.

    In Bengaluru, the rental market experienced a healthy 10% year-over-year growth in H2 2024. The East and North Bengaluru micro-markets saw the highest growth in rental values, increasing by 20% and 19%, respectively. The premium housing market in Central Bengaluru remained robust, with rents significantly higher than the average rents in other micro-markets.

    Bengaluru’s under-construction projects saw a 25% year-over-year increase in capital values, outpacing the 19% rise in completed projects. The East and Central Bengaluru micro-markets saw a steep rise of 19-22% in completed project values by December 2024.

    The demand for ready-to-move-in properties, the appeal of Central Bengaluru, and the completion of a new metro route in Eastern Bengaluru have been key drivers of capital appreciation.

    Central Bengaluru recorded a striking 31% year-over-year rise in average capital values, while East, South, and North Bengaluru also emerged as hotspots, with floor prices increasing by 24%, 21%, and 20%, respectively. These gains were primarily driven by rising demand for luxury floors and escalating input costs.

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