Under-construction property surge propels luxury housing boom: Savills India

The under-construction residential projects in major cities have recorded remarkable price appreciation, soaring up to 55% over the year, according to the latest report by Savills India. The ongoing price movement demonstrates a strong demand base, reflecting the positive sentiment in the market.

Gurugram and Mumbai led the surge in under-construction property values, with increases of up to 55% and 10%, respectively, while Bengaluru and North Goa saw gains of 25% and 16% compared to previous years. The introduction of new projects offering high-end amenities, quality specifications, and staggered payment plans encouraged buyers to invest in under-construction properties.

Ready properties have also experienced steady appreciation across major cities, with an average increase of up to 25% over the year. As the residential market gains momentum and capital values have surged in recent months, buyers are becoming more motivated to make purchasing decisions, anticipating further strengthening of property prices. This sentiment is further supported by the Reserve Bank of India’s Monetary Policy Committee’s recent decision to maintain interest rates unchanged.

Shveta Jain, Managing Director, Residential Services, Savills India said, “The surge in luxury home sales in 2024 has been driven by several key factors, including a robust economic growth and a growing appetite for exclusive, amenity-rich properties that align with modern lifestyles. The increase in new launches with high-end amenities and flexible payment options reflects the evolving preferences of buyers seeking quality and convenience. This upward trend underscores the strong fundamentals of the luxury residential market, bolstered by positive buyer sentiment and stable interest rates.”

Price Trends

Mumbai

* During 2024, Mumbai witnessed an average 1% YOY rise in capital values for completed properties while a 10% YOY increase for under-construction properties.

* The micromarkets of Central Mumbai and Western Suburbs. Others witnessed a significant increase of 13%-50% YOY in capital values on account of the introduction of a few high-end under-construction properties commanding prices higher than the existing market average.

* The market witnessed significant traction in demand for the luxury segment. Larger spaces in bungalows and prime residences were preferred due to the increasing trend of hybrid working, especially by professionals in the financial services industry as well as in legal domain.

* The market is witnessing enquiries from homebuyers looking to relocate from northern locations in the city such as Bandra, Khar to select locations in Central and South Mumbai that are well connected by the recently operational Coastal Road.

* During 2024, Mumbai witnessed an increase of 1%-3% YOY in average rental values.

* The rise in rental values was partly attributed to pent-up demand for rental properties due to the redevelopment of dilapidated buildings in the city.

* Properties located near metro stations saw a substantial increase in rental values due to their convenient connectivity to business hubs and entertainment districts.

Bengaluru

* Bengaluru’s premium residential market witnessed growth in under construction projects averaging 25% YOY compared to about 19% YOY rise across completed projects.

* East and Central Bengaluru noted a steep YOY growth of 19-22% across completed projects in December 2024. The strong preference for ready-to-move-in properties, along with the appeal of Central Bengaluru and the completion of the new metro route in Eastern Bengaluru, has been the major driving factors behind capital appreciation.

* Central Bengaluru micromarket recorded a remarkable annual increase of 31% in average capital values. Notably, East, South and North Bengaluru have also emerged as key hotspots, witnessing significant YOY floor price increases of 24%, 21% and 20% respectively. This is primarily due to the high demand for luxury floors, coupled with rising input costs.

* The city witnessed an increase in average rental value by 10% YOY in H2 2024.

* The East and North micromarkets experienced the highest growth in average rentals, with YOY increases of 20% and 19%, respectively.

* The rental market for premium housing in Central Bengaluru remains robust, with rents significantly higher than the average rents of other micromarkets.

Delhi

* The increase in average capital values over the year of luxury independent floors in Delhi was recorded at 9% at the city level. Rising construction and land acquisition costs, coupled with strong demand for spacious floors with terraces, were the primary drivers behind the price hike.

* The South Central micromarket has seen the highest growth, with independent floor prices rising by 13% YOY. Following closely, the South West and South East micromarkets also recorded notable growth, with a 12% YOY increase in floor prices.

* The rise in average capital values of plots in Delhi remained relatively moderate in 2024, especially when compared to the significant 23% annual increase observed in 2023.

* Delhi witnessed an overall increase of 4% in average capital values of plots, indicating a more stabilized growth pattern.

* The South West and South Central regions experienced the most notable gains, with plot values rising by 8% and 6% YOY, respectively. The South East micromarket recorded a 4% YOY increase in plot values, continuing its steady growth trajectory.

The increase in average rental values moderated to 9% in 2024, compared to the 26% annual growth recorded in 2023.

* The South East micromarket witnessed the highest growth with a 13% YOY increase, followed by the Central 1 and South Central micromarkets, which observed annual hikes of 11% and 10%, respectively.

Gurugram

* The average capital value of properties in Gurugram continued to witness robust growth in 2024.

* Residential plots saw a 22% increase in quoted capital values, on average, at the city level.

* Completed properties experienced a 20% rise in quoted capital values, while under-construction properties reached a new peak, with average capital values rising by 25% at the city level.

* New Gurugram remains the top-performing micromarket for under-construction properties, recording the highest annual appreciation of 55% in average capital values.

* Golf Course Road and Dwarka Expressway, with YOY increases of 22% and 16% respectively, also saw strong growth in average capital values for under-construction properties.

* Golf Course Road led the market for ready-to-move properties, recording a 24% YOY increase in average capital values. This was followed by New Gurugram and the GCER & SPR micromarkets, which saw YOY increases of 21% and 19%, respectively, in the quoted capital values of completed properties.

* The increase in average rentals remained moderate, with a 9% YOY growth at the city level, reflecting a more stabilized and steady growth pattern.

* Dwarka Expressway and Golf Course Road recorded the highest increases in average rentals, with 12% and 11% YOY growth, respectively.

NOIDA

Average capital values of completed and under-construction properties in NOIDA increased in the range of 1%-24% on YOY basis across micromarkets.

The NOIDA-Greater NOIDA Expressway and NOIDA Others micromarkets saw the highest growth in capital value for completed properties, registering a 24% YOY increase.

* NOIDA Others, with a 16% YOY increase, remains the top-performing market in the under-construction properties category.

* The NOIDA-Greater NOIDA Expressway micromarket follows closely, securing the second position with a 12% YOY increase.

* The NOIDA-Greater NOIDA Expressway micromarket experienced significant rental growth in 2024, with a 22% YOY increase.

* The NOIDA Others and Sector 150 micromarkets followed, recording 16% and 12% YOY increases in average rental values, respectively.

North Goa

* Average capital values for villas in North Goa witnessed a steep rise of 16% YOY. This increase in prices is attributed to its rising popularity among homebuyers as a second home location owing to high rental yields, a growing preference for modern housing, and the appeal of remote work combined with flexible working arrangements and quality of life as well as a demographic shift towards younger, lifestyle-focused buyers.

* The price increase is primarily contributed by the growth witnessed in emerging locations in the micromarkets of Peri-Coastal Belt and the North Hinterland that registered an increase of 22%-23% YOY.

* Homebuyers continued to prefer gated villas in locations along the North Beach District, such as Anjuna, Arpora, Baga, Calangute, Candolim and Vagator, thereby signifying the strength that lies in its Portuguese neighbourhoods, famous restaurants & hotels, and proximity to the popular sea beaches. This has led to a 19% YOY increase in prices in these locations.

* The market is witnessing a significant demand for second homes from Tier I cities (namely Delhi, Bengaluru and Mumbai) as well as Tier II cities (namely Chandigarh, Kanpur and Indore).

* Homebuyers in Goa are increasingly prioritizing green living. With more consciousness towards eco-friendly living, the market is witnessing a rise in gated amenities (including better security and more green spaces) fitted with modern facilities in Assagao, Siolim, Anjuna and Candolim. Such developments appeal to HNIs seeking luxurious yet environmentally responsible lifestyles.