Mumbai leaves Delhi behind in major housing markets as homebuyers ditch the national capital

Source: Business Today

Demand for residential homes continued to surge in Mumbai in 2023. The coastal city not only held on to its top position in the pecking order of major housing markets in the country, but also extended its lead over Delhi in 2023. Meanwhile, the National Capital Region of Delhi (Delhi-NCR) slipped to the third spot as home sales remained tepid.

Data from Anarock Research shows that in 2023 some 153,870 housing units were sold in the Mumbai Metropolitan Region (MMR), which was 40 per cent higher than the 109,730 units sold in 2022. It also reported the highest number of new launches - 157,700 units or 27 per cent over the previous year’s number of 124,650 units. While average price of homes per square foot stood at Rs 13,700 after 15 per cent appreciation over Rs 11,890 in 2022.

According to analysts at Knight Frank India, homebuyers in Mumbai continue to demonstrate confidence in the property market, buoyed by stable demand and an enhanced positive sentiment. “This optimism has resulted in a significant surge in property registrations in Mumbai. Of the overall registered properties, residential units constitute 80 per cent, the remaining 20 constitute non-residential assets,” they say.

The year 2023 witnessed a remarkable upswing for the city’s real estate market as the city achieved its highest property registrations in 11 years, driven by rising income levels, better affordability, and a positive homeownership outlook. Notably, a 57 per cent increase in share of high-value property registrations attests to the robustness of the market. Supported by stable interest rate and an increasing preference for bigger and better homes, homebuyer confidence continues to fuel Mumbai's real estate momentum,” says Shishir Baijal, Chairman & Managing Director, Knight Frank India.

In comparison, the Delhi-NCR market witnessed an offtake of 65,625 units in 2023 - only 3 per cent higher than 63,710 units the previous year. While new launches surged 36 per cent to 36,735 units - they remained significantly lower than most other markets like Bengaluru (54,435 units), Pune (83,625) and Hyderabad (76,345), apart from MMR. Average price per sq.ft. stood at Rs 5,800 or 15 per cent higher than Rs 5,025 in 2022.

Moreover, the Delhi-NCR market lost its position in the pecking order. Traditionally the second largest housing market in India, after MMR, it slipped to the third spot in 2023 as lack of enough enthusiasm from homebuyers dented its offtake. Pune emerged as the second largest market after MMR with 86,680 units sold and 83,625 units launched during the year. In terms of average price, Delhi lagged Pune as well. The average price per sq.ft. in Pune surged 13 per cent year-on-year to Rs 6,750 in 2023.

“Interestingly, (Delhi) NCR was seen as deliberately restricting new supply in the year, to approx. 36,735 units, though it witnessed extremely healthy sales at approx. 65,625 units. With this cautious approach, NCR reduced its unsold inventory stock by a very significant 23 per cent annually,” says Anuj Puri, Chairman, Anarock Group.