Mumbai ranks 3rd, Delhi-NCR 5th in global property price increase; here’s what we need to know

London-based global property consultancy firm Knight Frank in its recent report ‘Prime Global Cities Index Q1 2024’ stressed that Mumbai and New Delhi recorded a sharp annual increase in their real estate prices, while Bengaluru witnessed a modest 4.8% rise in the first quarter of 2024.

The report by the global property consultant said Mumbai's 10% price growth in the past 12 months was largely due to the rise in demand in the city. The reports said, though the demand was strong for all segments, but was primarily driven by sale of higher value products in the backdrop of a strong economic environment which continues to gain momentum.

Mumbai recorded the third highest year-on-year growth in prime residential prices during the quarter, pushing it up the ranking table by three places to 3rd position from its 6th position in Q1 2023.

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The report further said the National Capital Region rose fifth rank in first quarter of 2024 with a growth of 10.5% on a yearly basis against 17th the same period of 2023. However, Bengaluru observed a decline in ranking from 16th place in Q1 2024 to 17th rank in Q1 2024, even while it recorded a 4.8% YoY growth in residential prices.

India's cities, notably New Delhi and Mumbai, witnessed a surge in house prices driven by robust economic growth, with annual GDP growth exceeding 8% in the just concluded financial year 2023-24.

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"The strong demand trend for residential properties has been a global phenomenon, led by gateway markets of Asia-Pacific and EMEA (Europe, Middle East, and Africa)," said Shishir Baijal, CMD, Knight Frank India.

"Like its peers in these regions, the improved rankings of Mumbai and New Delhi on the Prime Global Cities Index was underscored by the resilience in sales growth volume. We expect the momentum of sales to remain stable over the next few quarters as the economic conditions are likely to remain broadly unchanged" he added. 

Manila tops the list

The rise in global prime residential price index was recorded at 4.1 % across the 44 markets in the 12 months ending March 2024 where prices are rising at their fastest rate since the third quarter of 2022.

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Manila, the capital city of Philippines, claimed the top spot in the ranking with a 26.2% annual rise in prices. The growth, as per the Knight Frank report, can be attributed to two key factors: purchasing power, and substantial infrastructure investments within and around the city.

Tokyo in Japan jumped 17% up with 12.5% yearly price growth and ranked 2nd in the index. Despite Japan's overall population decline, Tokyo sustains a net population growth owing to migration from other regions within the country.