Mumbai secures 3rd spot on Prime Global Cities Index Q4 2023 after Manila and Tokyo

Mumbai recorded the third highest year-on-year (YoY) growth in luxury housing prices in Q1 2024 followed by Delhi at fifth position. Bengaluru secured 17th spot

Luxury homes prices in Mumbai and New Delhi recorded the highest year-on-year growth in Q1 2024, pushing the financial city to the third spot after Manila and Tokyo. Delhi was at the fifth position but Bengaluru witnessed a slight drop to 17th rank, Knight Frank’s Prime Global Cities Index showed.

Luxury homes prices in Mumbai and New Delhi recorded the highest year-on-year growth in Q1 2024, pushing the financial city to the third spot after Manila and Tokyo. (Representational photo)

Mumbai recorded the third highest year-on-year (YoY) growth in prime residential prices in Q1 2024, pushing it up the ranking table by three places to 3rd position from its 6th position in Q1 2023. NCR rose from 17th rank in Q1 2023 to 5th in Q1 2024 with a growth of 10.5% YoY. 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, it showed.

Mumbai’s rise on the international index was largely due to the rise in demand in the city. While the demand has been strong for all segments, there was an increase in the sale of higher value products.

New Delhi and Mumbai, have witnessed a surge in house prices driven by robust economic growth, as indicated by our findings, with annual GDP growth exceeding 8%, the report said.

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

“The strong demand trend for residential properties has been a global phenomenon, led by gateway markets of Asia- Pacific and EMEA. 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,” said Shishir Baijal, chairman and managing director at Knight Frank India.

Manila claimed the top spot in the ranking with a 26.2% annual rise in prices which was the highest in the ranking this quarter. The growth can be attributed to two key factors: a robust economic performance enhancing consumer confidence and purchasing power, and substantial infrastructure investments within and around the city, which have further stimulated demand.

Tokyo jumped 17 places up with 12.5% YoY growth and ranks 2nd in the index. The rise in house prices at the beginning of 2024 can be credited to two primary factors: advantageous mortgage terms provided by Japanese banks and a depreciation of the yen, leading to heightened foreign investment in Tokyo's real estate market. Despite Japan's overall population decline, Tokyo sustains a net population growth owing to migration from other regions within the country.

The Prime Global Cities Index is a valuation-based index tracking the movement of prime residential prices across 44 cities worldwide. The index tracks nominal prices in local currency.

“The rebound in global housing markets is continuing, as evidenced by our Prime Global Cities Index reaching 4.1% annual growth. Rather than heralding a return to boom conditions, the index indicates that upwards price pressures are stemming from relatively healthy demand, set against continued low supply volumes. The pivot in rates – when it comes – will encourage more vendors into the market, leading to a welcome return to liquidity in key global markets,” said Liam Bailey, Knight Frank's Global Head of Research.