Knight Frank, the international property consultancy, in its recent report ‘Prime Global Cities Index Q4 2023’ noted that Mumbai, New Delhi and Bengaluru, (Indian cities considered for the study) recorded an increase in their average annual prices of prime residential or luxury homes in Q4 2023.
Mumbai’s impressive 10% price growth in the past 12 months was driven primarily by affluent homebuyers looking for a lifestyle upgrade in the backdrop of a strong economic environment that continues to gain momentum.
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Mumbai recorded the third highest year-on-year (YoY) growth in prime residential prices in Q4 2023, pushing it up the ranking table by 5 places to 3rd position from its 8th position in Q4 2022.
NCR rose from 28th rank in Q4 2022 to 16th in Q4 2023 with a growth of 4.2% YoY. However, Bengaluru observed a decline in ranking from 20th place in Q4 2022 to 27th rank in Q4 2023, even while it recorded a 2.2% YoY growth in residential prices.
The rise in the global prime residential price index was recorded at 3.7% across the 45 markets in the 12 months ending December 2023. This is the strongest growth rate recorded since Q3 2022 with 82% of cities seeing growth on an annual basis.
Shishir Baijal, chairman and managing director at Knight Frank India, said, “The strong growth in prime prices is a reflection of the surge in demand seen in this residential segment across markets in India. With homebuyers increasingly prioritizing lifestyle upgrades, bolstered by the nation’s stable economic outlook and positive market sentiment, this segment should likely see price levels continue to elevate in the near term.”
Manila claimed the top spot in the ranking with a 26.3% annual rise in prices. The capital city’s performance is attributed to strong domestic and foreign investments. Dubai with 15.1% YoY growth ranks 2nd in the index.
The Prime Global Cities Index is a valuation-based index tracking the movement of prime residential prices across 45 cities worldwide. The index tracks nominal prices in local currency.
Liam Bailey, Knight Frank’s global head of research, said, “The biggest impact of the rate tightening cycle in the past 12 months has been on sales volumes, which have fallen in most markets by around 10% to 20%. While prices did initially fall as rates rose in 2022, as supply has been squeezed prices have ticked up. Rate cuts in the second half of 2024 will add further impetus to the market.”
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