In India, real estate prices rose 5.9 % in the third quarter, the second-highest increase in Asia.

Home prices in India increased by 5.9% year-on-year in the third quarter of 2023, according to Knight Frank Global House Price Index - Q3 2023. This growth over the past year has seen India climb 18 places in the rankings to 14th place. Average annual price growth was 3.5 percent, nearly equal to the pre-pandemic ten-year average of 3.7 percent, the report indicates.

The report notes that the reason for the country's rising home prices is stable economic growth, which provides greater financial security for end consumers despite the challenges of rising mortgage rates and threats of inflation. In addition, at the beginning of the pandemic, central and regional governments took steps to stimulate home sales by providing incentives to buyers, which led to an acceleration in the market and increased sales.

With 89.2% annualized growth, Turkey topped the global house price index in the third quarter of 2023. Southeast Europe took the next five places in the ranking, with Greece (14.0%), Croatia (13.7%) and Northern Macedonia (11.0%) showing steady annual growth.

With 6.3% annual growth, Japan ranked first in the Asia-Pacific region for real estate price increases. India was the second fastest growing country in terms of house price growth after Japan.

The Indian real estate market has been either flat or declining for five to six years since 2013.

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However, since the Covid-19 pandemic, demand for housing has increased significantly, exceeding previous figures. Several factors have contributed to the rise in real estate prices, including an influx of accumulated demand, a desire for better living conditions, and a willingness to spend more for better and more modern amenities. "In addition, improving economic conditions and infrastructure development have led to higher real estate prices. While real estate prices have risen significantly across the country, Hyderabad has consistently outperformed other metros on a year-on-year basis, experiencing the highest price hike due to the influx of corporates moving their offices to this city. This trend is expected to continue," said Prashant Rao, managing director of Poulomi Estates, a Hyderabad-based real estate developer.

"With the rising cost of borrowing due to high inflation rates, steady fundamentals of the national economy and growing residential real estate ambitions, there is a growing demand among buyers in the country's prime residential markets. In addition, accelerating urbanization is adding impetus to infrastructure development and encouraging the emergence of new residential areas in India's urban centers," says Shishir Baijal, Chairman and Managing Director, Knight Frank India.

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