Housing Prices In Peripheries And Outskirts Zoom Past Prime Areas In Last 6 Years Across Top 7 Cites

Building up to something new, the real estate market of India is witnessing an interesting shift. Some outlying areas have seen higher price growth over the past six years than many prime locations in the top 7 cities, according to a recent report by ANANROCK, a real estate firm. Take Benaluru’s Gunjur for example. This peripheral area saw its average residential price surge almost 69 per cent, rising from Rs 5,030 per square ft. in 2019 to Rs 8,500 per sq. ft. in the third quarter of 2024 (Q3 2024). On the other hand, the city’s prime area, Thannisandra Main Road saw around 62 per cent average price growth during the same period. The prices surged from Rs 5,175 per sq. fit to Rs 8,400 sq. ft. in Q3 2024.

What is driving this boom in the peripheries?

On average, residential prices across the top 7 cities have been rising in the last six years. The scope of price appreciation seems to be higher in peripheral areas as compared to prime areas of these cities.

The factors driving this change are:

- Improved Connectivity in peripheral areas

- Development of more luxury projects

- Better green and open spaces for residential housing

The report noted that peripheral regions are being developed with improved connectivity which has further boosted the liveability in these areas. Says Santhosh Kumar, Vice Chairman, ANAROCK Group, “The last few years have seen several luxury projects launched in these peripheries to meet demand."

The infusion of luxury projects in peripheral areas has significantly contributed to the rise in average housing prices there. “With sufficient land available in the peripheries, developers have zeroed in on them to launch large state-of-art projects there. Improved connectivity has made it feasible for buyers to live in larger societies with generous green open spaces. This trend has become very prevalent after the COVID-19 pandemic,” Kumar states.

City-wise Trends

Bengaluru is not alone in this trend, Delhi’s National Capital Region (Delhi-NCR) is also closely keeping up with the surge.

The Noida Expressway in NCR saw residential prices grow over by 66 per cent, from Rs 5,075 per square foot in 2019 to Rs 8,400 in Q3 2024. Prime locations like Raj Nagar Extension, meanwhile, recorded a relatively lower growth of 55 per cent during the same period.

The peripheral areas of the Mumbai Metropolitan Region (MMR) such as Panvel also witnessed a price surge of 58 per cent while Worli, a known premium location saw growth capped at 37 per cent. A similar pattern emerged in Pune, Chennai, and Kolkata where peripheral locations like Wagholi, Navlur, and Madhyamgram outperformed their competitive prime centers in terms of price hikes.

In Chennai’s Navalur, the prices have risen by 54 per cent due to its growing reputation as a well-connected IT corridor. Meanwhile, the prime areas of Chennai, like Anna Nagar and T Nagar have seen a comparatively modest appreciation of 35 per cent and 31 per cent, respectively.

Pune’s prime area Wakad saw a price appreciation of 27 per cent rising to Rs 8,300 per sq. ft. in Q3 2024 from Rs 6,530 per sq. ft. in 2019. Average prices there went from Rs 4,820 per sq ft in 2019 to Rs 6,600 per sq. ft. in Q3 2024.

Joka in Kolkata saw a price surge of 51 per cent from Rs 3,415 per sq. ft. in 2029 to Rs 5,150 per sq. ft. in the third quarter of this year. The peripheral areas, Madhyamgram and Behala also saw their prices appreciate by 43 per cent and 35 per cent respectively.

However, this phenomenon is not uniform across all cities. The prime areas in certain cities have managed to hold their ground like Delhi’s Dwarka Expressway which recorded a 93 per cent surge in prices, outperforming most peripheral areas across the country.

Hyderabad’s prime locations, Gachibowli and Kondapur, continue to see growth wherein the prices have appreciated 86 per cent in the last six years.

Housing in the peripherals has long since faced the challenge of longer commutes and in some cases underdeveloped social infrastructure. However, with the developer's eyes on these areas, luxury housing is witnessing a boost - contributing to the price surge.