There is headroom for home prices to rise in the near term, but forecasting for a longer term would be difficult, said Gaurav Pandey, Chief Executive Officer and Managing Director, Godrej Properties.

“There is a clear opportunity available, there is a short-term visibility, there is headroom for us to increase prices in specific micro markets and we are doing that as and when we feel the opportunity is right,” he said, in relation to the industry as well as his company.

Pandey spoke to the media separately at an event where Godrej Properties launched a National Talent Forum for Women, to encourage and increase women’s participation in the workforce.

Demand for homes

He said that Godrej Properties had been able to charge a premium for its projects across zones and micro markets. It has taken price hikes of 2-5 per cent every quarter in most of its projects. He pointed out that a good portion of the market growth has been due to the pricing. Price hikes have happened not only in new projects but also in new phases of existing projects. “We have very strong price expansion.”

Despite price hikes and the high prevailing rates of inflation in the economy, demand for homes have held steady. Pandey said that the trend over the last three years has shown that this was one of the few cycles where there has been a negative correlation between interest rates and residential demand.

He added that the premium segment, where the company operated, was not very sensitive to interest rates.

Knight Frank India’s recent quarterly update on the residential market showed that price levels have grown in tandem with demand across all markets. Compared with year-ago home prices have risen 2-13 per cent across cities in the first quarter of 2024, while they have grown 1-4 per cent sequentially in some markets and held steady in others. With demand outstripping new launches, prices are expected to remain buoyant.

Godrej Properties ended FY24 with record sales of ₹22,500 crore and sold over 14,300 homes with a total area of 20 million sq ft.

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