Delhi and the National Capital Region (NCR) saw the highest year-on-year surge in housing prices among eight Indian metro cities in 2021-22, as prices in Bengaluru and the Mumbai Metropolitan Region (MMR) largely remained stable, showed a report released by industry body Credai on Tuesday.

According to the study, average housing prices across the country rose 4%, while the number in Delhi-NCR was nearly triple, at 11.3%. Prices in Bengaluru and MMR increased only 1%.

The Housing Price Tracker 2022 report indicated that buyers preferred ready-to-move-in projects as compared to those under construction, particularly in all micro-markets in Gurugram. Developers and real estate dealers in the city also said the market had recovered after the bruising impact of the pandemic, largely due to end-users buying ready-to-move-in projects.

To be sure, housing prices have surged globally due to general price inflation as well as the ongoing Russia-Ukraine war.

Credai conducted its study in Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru and Ahmedabad.

The report showed that despite a rise in the prices of raw materials, there has been a pickup in housing demand, which has led to an increase in housing prices in 2021-22.

The study was conducted by Credai, Colliers (a private consultancy) and Liases Foras, a real estate data analytics firm.

Officials from Colliers said there was a marked difference between prices of under-construction and ready-to-move-in properties across markets.

For example, in micro-markets within Gurugram, such as Golf Course Road (GCR), Golf Course Extension Road and Sohna Road, ready-to-move-in properties were between 27% and 53% more expensive than under construction ones.

Kamaljit Singh, vice-president, Bestech, a Gurugram-based developer, confirmed that most buyers are end-users who prefer ready-to-move-in projects.

“Almost all the ready-to-move-in residential stock has been sold and there is a major price difference between finished and under-construction projects. There is also strong demand for plots and floors. The major reason for these trends is that people want to be sure that they get what they pay for instead of putting in what is yet to be completed,” he said.

As per the report, the Golf Course Road micro-market saw the highest year-on-year increase in housing prices at 13% due to an uptick in demand. On the other hand, Golf Course Extension Road and Sohna Road saw a relatively modest increase in housing prices at 6%.

“End-users have faith in the market, and we expect credible developers to see higher sales this year as end-users are discerning about the reputation of the developer. There can be a meaningful increase in prices over the next 6-9 months in the range of 5-10%, across most markets,” said Ramesh Nair, CEO, India, Colliers.

Real estate experts also observed that a continuous decline in unsold housing inventory despite rising fresh supply in the form of post-Covid customised launches is a positive sign, showing that demand is intact. The record FDI inflows in Indian realty also indicate a strong faith in the industry, they said.

“The government’s intervention to control the prices of raw materials to check the increase in home prices is also a positive development,” said Vinod Behl, a city-based real estate expert.

Harsh Vardhan Patodia, president of Credai National, said that the reduction in import duties on steel products, iron ore, and steel intermediaries, will cool off the prices of steel products, and help tide the rise in prices of projects, strengthening consumer sentiment.