Mumbai’s luxury real estate is seeing an annual price increase of 10%, primarily due to wealthy buyers seeking to upgrade their lifestyle.
According to Knight Frank’s Prime Global Cities Index, the average annual price of luxury homes increased in Q4 2023 in Mumbai (10%), Delhi-NCR (4.2%), and Bengaluru (2.2%). New Delhi also saw an increase in luxury home prices.
Mumbai moved up the ranking table five spots to third place from its eighth position in Q4 2022, with the third-highest year-over-year (YoY) growth in prime residential prices in Q4 2023. NCR saw a 4.2% YoY increase, rising from 28th place in Q4 2022 to 16th in Q4 2023. Bengaluru, however, saw a drop in rankings, going from 20th in Q4 2022 to 27th in Q4 2023, despite the city recording a 2.2% YoY increase in residential prices.
Manila took first place in the Knight Frank Prime Global Cities Index Q4 2023, with an annual price increase of 26.3%. The success of the capital city is due to robust inward and outbound investments. Mumbai is ranked third with 10% YoY growth, and Dubai is ranked second with 15.1% YoY growth in the index.
A valuation-based index that tracks changes in prime residential prices in 45 cities across the globe is called the Prime Global Cities Index. In local currency, the index tracks nominal prices.
Throughout the 45 markets, the increase in the global prime residential price index was 3.7% in the year that ended in December 2023. With 82% of cities experiencing annual growth, this is the highest growth rate since Q3 2022.
“The significant increase in prime prices is a direct result of the spike in demand for this residential market in India’s markets. According to Shishir Baijal, Chairman and Managing Director of Knight Frank India, “This segment should likely see price levels continue to elevate in the near term as homebuyers prioritize lifestyle upgrades more and more, bolstered by the nation’s stable economic outlook and positive market sentiment.”
According to Liam Bailey, Global Head of Research at Knight Frank, “Sales volumes have decreased by 10% to 20% in most markets over the last 12 months due to the interest rate tightening cycle.”
As rates increased in 2022, prices began to fall, but as supply became more scarce, prices gradually increased. Rate reductions in the second half of 2024 will give the market even more traction.”