What’s Going On With India’s Housing Market? Bengaluru and Hyderabad Lead the Way

If you’ve been keeping an eye on India’s housing scene, you might have noticed something interesting lately. Home prices are still going up in many cities, but not as fast as before. In fact, things seem to be cooling off a bit — especially after months of rapid growth.

So, what’s causing this shift? And which cities are still booming despite the slowdown? Let’s break down the numbers, trends, and what this all means for anyone looking to buy or invest in real estate in India.

India’s Residential Market: A Quick Overview

According to the latest Real Insight Residential April-June 2024 report by PropTiger.com, housing prices grew in all 8 major cities compared to last year — but the pace has slowed down. That’s right: real estate is still on the upswing, just not as aggressively.

The average year-on-year price increase across these cities was 9% in Q2 2024. That’s a drop from the 13% growth seen in Q1 2024. It’s not a crash, but definitely a cooling-off — kind of like switching from a roaring fire to a slow simmer.

Why the Slowdown?

Several factors are tempering price hikes:

• Increased housing supply: More new properties are entering the market, especially in mid and premium categories.
• Stable interest rates: The Reserve Bank of India (RBI) has kept repo rates unchanged, making home loans steady, but not necessarily cheaper.
• Moderate demand return: Demand is still there, but it’s more balanced than during the post-COVID frenzy.

Think of it like an overcrowded buffet — with more options on the table, prices have started to level out.

The Stars of the Show: Bengaluru and Hyderabad

Even as the overall market slows, two cities are bucking the trend: Bengaluru and Hyderabad. These southern stars are still seeing double-digit price growth, and it’s not hard to see why.

Bengaluru: The IT Hub That Keeps Growing

The tech-driven city of Bengaluru posted an over 13% jump in home prices compared to the same quarter last year. That’s one of the highest across all cities!

Why, you ask?

• Rising IT jobs: As tech companies expand, more professionals are moving to Bengaluru for work.
• Strong infrastructure: Ongoing metro projects and road expansions make commuting easier, attracting buyers to nearby areas.
• Developer activity: Builders are launching new projects, giving buyers more choice.

If you’ve ever driven through Outer Ring Road traffic during office hours, you’ll know it’s not for the faint of heart. But people are still flocking here for the job opportunities — and they’re buying homes while they’re at it.

Hyderabad: Affordable Luxury Meets Urban Demand

Hyderabad is also making waves with a 10% increase in housing prices year-on-year in Q2 2024.

What’s working in Hyderabad’s favor?

• Affordable housing relative to other metros: Even with rising prices, homes here are still relatively budget-friendly.
• Robust infrastructure: The city is investing heavily in roads, flyovers, and public transport.
• IT and pharma sector demand: Growing job hubs mean more buyers with stable incomes.

In many ways, Hyderabad offers the charm of Delhi or Mumbai, but without the sky-high pricing. For young professionals and families looking for modern homes without breaking the bank, it’s a solid bet.

Other Cities Show Modest Growth

While Bengaluru and Hyderabad are racing ahead, other big cities like Mumbai, Pune, and Delhi NCR are growing — just at a steadier pace.

Here’s how much prices have risen in Q2 2024 compared to last year:

• Ahmedabad: 11% increase
• Pune: 10% increase
• Delhi NCR: 8% increase
• Mumbai Metropolitan Region (MMR): 6% increase
• Chennai: 6% increase
• Kolkata: 5% increase

Kolkata saw the slowest growth, but it’s worth noting that different cities cater to different buyer segments. For instance, MMR continues to lead in luxury housing, while Pune remains popular for first-time homebuyers and investors.

What About New Launches?

Glad you asked! New project launches surged this quarter, especially in Bengaluru and Pune. In fact:

• Bengaluru’s new launches went up by a huge 111% year-on-year in Q2 2024.
• Pune saw a 92% increase in new housing projects.

This means developers are feeling confident. They’re betting on long-term demand and planning for the future. If you’re a buyer, this also translates to more options — perhaps a brand new flat with modern amenities isn’t too far from your reach.

How Does This Impact You?

If you’re house-hunting or thinking about investing, here’s what this means for you:

• You have more choices now: Thanks to the recent wave of new launches.
• Prices aren’t skyrocketing as fast: That gives you some breathing room to shop around and make informed decisions.
• Southern cities are hot right now: Bengaluru and Hyderabad continue to attract both homebuyers and investors.

Think of this period as a window of opportunity. The market’s still healthy, but not overheating — a sweet spot for negotiators.

What’s the Road Ahead?

Real estate experts believe that while growth may continue at a modest pace this year, it’s not likely to drop off drastically. The fundamentals — like urbanization, income growth, and job creation — are still strong.

In short: Don’t expect bargains around every corner, but don’t expect out-of-control price spikes either.

Final Thoughts

The Indian residential market is shifting gears. After an energetic sprint post-COVID, it’s now settling into a more sustainable, marathon pace. If you’re in the real estate game — whether you’re buying your first home or your fifth — this is a good time to do your homework, understand the trends, and plan wisely.

And if you’re watching Bengaluru or Hyderabad, just know — you’re not the only one!

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What do you think about this market moderation? Have you been house-hunting recently? Drop your thoughts or questions in the comments below. Let’s make this conversation two-way!

Disclaimer: This blog gives general information on real estate trends and is not financial advice. Please consult with professionals before making property-related decisions.