India's housing market enjoys rapid growth, but can it last?

livemint.com:

real estate market is showing robust performance in the second quarter of 2023, with sales maintaining its momentum as new supply continues to pour in. Remarkably, even with the influx of new properties, prices in primary economic hotspots are skyrocketing. The ISB – Housing.com Housing Price Index (HPI) shows an increase of 7.21% in property prices during Q2 2023, a jump from both Q1 2023’s 6.78% and Q2 2022’s 2.83%.

A similar upward trend is noted in city-specific indices, with property prices in Mumbai, Delhi NCR, and Bengaluru witnessing an impressive rise between 6 to 15%. This surge in property prices is being attributed to several factors, including the renewed interest towards home ownership and upgrading configuration and lifestyle amid the structural transformation after the pandemic world. Additionally, amid the surge in demand, we now see the pass-through of increased input costs to the homebuyers, which developers were previously reluctant to offload amid the sluggish market demand.

There is also a premium attached to the ‘much in demand’ but ‘limited in supply’ ready-to-move-in property. All these factors have collectively pushed up property prices across cities. Property sales across the top-8 cities registered a growth of 9.91% (y-o-y) with property sales in Mumbai leading the tally and growing at 16.14% compared to the same period in the preceding year.