Residential real estate prices have surged at a compound annual growth rate (CAGR) of 13% over the past two years, while consumer price index (CPI) inflation has moderated to 5.4% at the end of FY24, according to a recent report by Anarock.
Between 2013 and 2020, the top seven cities in India saw a cumulative housing supply of 23.55 lakh units against a demand for 20.68 lakh units. Despite periodic oversupply, prices have consistently risen since 2013. In the aftermath of the 2019 elections, average residential prices in these cities appreciated at a CAGR of 6%, climbing from Rs 5,600 per sq ft in June 2019 to Rs 7,550 per sq ft by FY24.
Shobhit Agarwal, MD & CEO of ANAROCK Capital, highlighted similar trends post the 2014 elections. "Average prices across the top seven cities saw an annual rise of over 6% in 2014 compared to the preceding year, increasing from Rs 4,895 per sq ft in 2013 to Rs 5,168 per sq ft in 2014," Agarwal stated.
Over the past decade, periods of excess supply have led to stable price growth that aligned with inflation during the pre-pandemic era. By the end of 2016, available inventory had peaked at approximately 8 lakh units. However, post-pandemic recovery in the residential real estate market has led to substantial price growth, significantly outpacing general inflation, Anarock reported.
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