Real estate: Luxury home prices in Mumbai, Delhi see 11% hike in 2024; details here

The price of luxury homes in Mumbai and Delhi have already seen a significant increase in the first quarter of FY24. According to Knight Frank's 'Prime Global Cities Index Q1 2024' report, both the cities have seen an 11% increase in  luxury home prices. On the other hand, Bangalore has seen a dip, recording a mere 4.8 per cent Y-o-Y increase in prices. 

In Delhi, the prices saw a 10.5 per cent Y-o-Y growth. The city rose from 17th place in Q1 2023 to 5th place in Q1 2024. The city of Mumbai saw the third-highest year-on-year (Y-o-Y) growth in prime residential prices globally, jumping from the sixth position in Q1 2023 to the third position in Q1 2024. This surge was driven by strong demand for higher-value properties.

Housing prices and economy

According to Knight Frank India's economic growth – annual GDP exceeding 8 per cent – has influenced the rise in house prices in its major cities. This is due to a broader global phenomenon, where prime residential prices in 44 markets saw a 4.1 per cent increase in the 12-month period ending March 2024. This marks the fastest rate of growth since Q3 2022.

The Prime Global Cities Index, which tracks the movement of prime residential prices across 44 cities, shows a 4.1 per cent annual growth rate. Liam Bailey, Knight Frank's Global Head of Research, said this rebound indicates healthy demand and low supply volumes rather than a return to boom conditions. He added, "The pivot in rates – when it comes – will encourage more vendors into the market, leading to a welcome return to liquidity in key global markets."

Shishir Baijal, chairman and managing director at Knight Frank India, said: "The strong demand for residential properties globally, especially in gateway markets of Asia-Pacific and EMEA."

He said the improved rankings of Mumbai and New Delhi to resilient sales growth volumes. "We expect the momentum of sales to remain stable over the next few quarters as the economic conditions are likely to remain broadly unchanged," Baijal said.