Bengaluru, Mumbai properties outperform other cities in price appreciation, says Anarock report

"If we consider yearly trends, it emerges that 2022 saw the maximum yearly rise — 6 percent — in average property prices," said Prashant Thakur, Senior Director and Head (Research), Anarock, "The previous four years on the other hand, saw either no change or a maximum of 3 to 4 percent year-on-year increase in 2021 against 2020."

The stop-start movement in property prices has been punctuated by the COVID-19 outbreak, which followed a prolonged period of shortfall in demand. “Post-pandemic, demand soared across cities as did developers’ input costs, which caused prices to rise particularly in 2021 and 2022,” Prashant Thakur added.

On the rental yield front, Bengaluru continued to outperform, registering a yield of 3.9 percent recorded in 2022. Gurgaon came second place with a rental yield of 3.7 percent. Rental yields in Mumbai and Pune stood at 3,8 percent and 3.5 percent respectively.

According to Anarock, profitability potential for real estate investors remains promising this year, despite the global economic slowdown and inflation. "Property prices are likely to rise by another 5 to 8 percent in larger cities and this bodes well for investors focused on capital appreciation," Thakur said.

He added, "The RBI will likely take a pause after a spate of interest rate-hikes, so growth momentum will continue. While 2023 will continue to be driven by end-user demand, serious long-term investors will find market dynamics more than favourable."