Mumbai, Delhi Witness Surge in House Prices, Ranking Among Top 5 Globally

A recent study by Knight Frank revealed that Mumbai and Delhi witnessed a stellar performance in the global housing market. The report, titled "Prime Global Cities Index January-March 2024," highlighted a significant surge in house prices in these two Indian metropolises, propelling them into the top tier of global cities for annual house price growth in the first quarter (Q1) of 2024. T

his stands in contrast to Bengaluru, another major Indian city, which saw a slight decline in prime residential property prices despite recording a positive year-on-year (YoY) growth.

Indian Cities Shine in Global House Price Rise

Mumbai Takes the Podium

Mumbai emerged as a frontrunner, claiming the third position globally with an impressive 11.5% YoY growth in prime residential prices during Q1 2024. This remarkable jump propelled the city up three coveted positions from its ranking of sixth in the same period of 2023.

This upward trajectory signifies a strong and growing demand for luxury housing in Mumbai, potentially fueled by a combination of factors like a growing affluent class and a limited supply of prime properties.

Delhi Climbs the Ladder

Delhi NCR also witnessed a noteworthy rise in house prices, securing the fifth position globally with a 10.5% YoY growth. This marks a significant improvement from its previous ranking of 17th in Q1 2023. The national capital region seems to be benefiting from the positive economic climate in India, with a robust GDP growth attracting potential homebuyers and investors.

Bengaluru's Ranking Sees Minor Shift

While Bengaluru couldn't replicate the meteoric rise of Mumbai and Delhi in terms of ranking improvement, it still achieved a positive 4.8% YoY growth in residential prices. However, this growth wasn't enough to prevent a slight decline in its ranking, moving from 16th to 17th place.

This indicates a more stable market in Bengaluru compared to the other two Indian cities, with a possibility of prices experiencing a more balanced growth pattern in the coming quarters.

Manila and Tokyo Lead the Pack

The top two spots in the global house price rise rankings were claimed by Manila and Tokyo, respectively. Manila achieved a staggering 26.2% YoY growth, which can be attributed to factors like a strong economic performance and significant infrastructure investments within the city.

Tokyo, on the other hand, saw a substantial increase of 12.5%, likely driven by exceptionally advantageous mortgage terms offered by Japanese banks and a depreciation of the yen, leading to heightened foreign investment in the city's real estate market.

Factors Driving the Rise in Indian Cities

Knight Frank attributes the surge in house prices in Mumbai and Delhi to India's robust economic performance, with an annual GDP growth exceeding 8%. This strong economic climate has boosted consumer confidence and fueled demand for residential properties, particularly in prime locations.

Additionally, a limited supply of land in these megacities further contributes to the price rise, making existing properties even more valuable.

Global Housing Market Rebound

The Knight Frank Prime Global Cities Index also revealed a positive trend in the global housing market, with an overall annual growth of 4.1% across 44 major cities. This growth is primarily driven by healthy demand set against a backdrop of continued low supply. While this indicates a potential recovery from previous market slowdowns, experts like Liam Bailey, Knight Frank's Global Head of Research, advise caution.

He suggests that the current price pressures might not translate into a full-blown boom, and a future pivot in interest rates could potentially encourage more sellers to enter the market, leading to a return to normalcy.