Housing demand rages on, prices up 7% in January-March 2023 period

"Apart from a rise in input costs, limited supply of the right product and ready-to-move-in projects for end-use have led to an upward push in prices," said Ankita Sood, Head of Research at PropTiger.

The outlook from PropTiger is that prices could go higher with ready-to-move homes attracting a premium. However, there are other factors at play that could make homes more expensive this year. One of these factors is material prices.

With the prospect of a cement-price hike looming just around the corner, developers might well pass it onto the buyer. Other building materials are also expected to see price revisions.

"There isn't really much profit margin that can absorb all this increase in input costs," said Anuj Puri, the chairman of the Anarock Group, "Any increase in input costs will go straight to the buyer, and the thinking is that this could be between 7 to 10 percent for FY24."

However, if there's one factor that could offset this potential price-hike, it's new inventory. According to Anarock, India saw 1.09 lakh home launches in the first quarter of 2023 — 23 percent higher year-on-year, and 18 percent more than a quarter ago. Nearly 36 percent of these launches were homes in the mass market segment, priced between Rs 40 lakh and Rs 80 lakh.

Developers say more launches are on the anvil from a few quarters ago, given that launches were on the backburner in an attempt to focus on exhausting existing inventory.

"Internally, we have clear target: we have to push sales up by 30 to 40 percent," said Sandeep Runwal, MD of the Runwal Group, "So, you are going to see launches up by 30 to 40 percent for sure."

While this increased supply could add downward pressure on prices, some predict that the recent layoffs, sluggishness in the IT sector and a hike in repo rates, should it happen, could also have an impact on consumer appetite. So, while home prices may up, there's just no saying if they will go up further from here.