Mumbai’s luxury real estate market is witnessing an impressive annual price increase of 10%, largely driven by affluent buyers seeking lifestyle upgrades.
Luxury Home Prices on the Rise
According to Knight Frank’s Prime Global Cities Index, the average annual price of luxury homes saw significant growth in Q4 2023. Mumbai topped the charts with a 10% increase, followed by Delhi-NCR at 4.2%, and Bengaluru at 2.2%. New Delhi also experienced an uptick in luxury home prices.
City Rankings and Growth
- Mumbai: Jumped five spots to 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 to 16th place.
- Bengaluru: Dropped in rankings from 20th to 27th, despite a 2.2% YoY increase.
Global Comparisons
- Manila: Topped the index with a 26.3% annual price increase, attributed to strong investments.
- Dubai: Secured second place with a 15.1% YoY growth.
- Mumbai: Ranked third with a 10% YoY growth.
About the Index
The Prime Global Cities Index is a valuation-based index tracking changes in prime residential prices across 45 global cities, measured in local currency.
Global Market Overview
The global prime residential price index increased by 3.7% in the year ending December 2023. This is the highest growth rate since Q3 2022, with 82% of cities experiencing annual growth.
Insights from Experts
- Shishir Baijal, Chairman and Managing Director of Knight Frank India: "The significant increase in prime prices is a direct result of the spike in demand for this residential market in India. This segment is likely to continue seeing elevated price levels in the near term as homebuyers prioritize lifestyle upgrades, supported by the nation’s stable economic outlook and positive market sentiment."
- 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 scarcity in supply led to prices gradually increasing. Rate reductions in the second half of 2024 will further boost the market."