Surging Demand in NCR’s Housing Market due to Rising Raw Material Costs
January 11th, 2025
The NCR housing market is witnessing surging demand in 2025, as rising raw material costs drive property prices higher, reshaping buyer preferences and boosting real estate investment.
NCR housing market is experiencing remarkable growth – fuelled by increasing demand, infrastructure development, and significant impact of raw material prices on real estate. Rising costs have contributed to higher property prices – impacting decisions of investors & families, and influencing market dynamics. This trend highlights growing interest in both premium and luxury housing, reflecting the region’s evolving real estate landscape.
Table of Contents
Important Factors Driving the Demand in NCR Real Estate
Understanding the factors in any housing market is important for homebuyers and investors. Impact of raw material prices on real estate, including cement and steel, have significantly increased construction expenses – leading developers to revise property prices NCR.
Due to this, demand in NCR real estate continues to grow – also supported by improved infrastructure and evolving homebuyer preferences. The link between rising costs and sustained market demand highlights the region’s resilience and growth potential.
Current Trends in NCR Housing Market
Rising costs and sustained demand in NCR real estate are driving significant transformation in this market. Here are the key trends shaping it:
- Property Sales and Prices
- Property prices have surged by 137% since 2019, reflecting the region’s dynamic growth
- In 2023, housing prices in Gurgaon rose by 61%, while the overall demand surged due to significant impact of raw material prices on real estate
- Increased costs of labour & construction have pushed developers to adjust pricing strategies, contributing to higher property values
- Areas Experiencing High Growth
- Gurgaon continues to lead as a high-demand area in NCR, attracting investment in luxury apartments and premium properties
- Noida and Greater Noida are witnessing growth in housing demand, driven by their proximity to Delhi & upcoming Jewar International Airport, and improving infrastructure
- Ghaziabad is gaining traction for its cost-effective housing options, meeting the needs of first-time buyers
- Types of Properties in Demand in NCR real estate
- Luxury apartments in NCR are attracting high-net-worth individuals seeking premium living spaces and curated amenities in gated communities
- Affordable housing in NCR remains a popular choice for middle-income families looking for budget-friendly options
- Independent homes and villas are gaining popularity, as homebuyers seek spacious and private living spaces
Read More: How to Access Jamabandi Haryana Online: A Step-by-Step Guide
Rising Raw Material Costs: The Trigger
Property prices NCR are on the rise, with significant impact of raw material prices on real estate. Essential construction materials such as cement, steel, and bricks have seen substantial price hikes, creating ripple effects across the industry. This trend is impacting demand in NCR real estate, as developers and buyers navigate the challenges posed by escalating expenses and extended project timelines.
Key Raw Materials and Their Price Hikes
As per a report from Colliers, 5 yr price changes in raw materials have been the following:
- Steel 57%
- Cement 30%
- Copper 91%
- Aluminium 57%
- Labour 150%
Reasons Behind Increased Raw Material Costs
- Inflation: Persistent inflation has pushed up production and transport expenses, adding to the raw material price hike
- Supply Chain Disruptions: Delays and shortages caused by global challenges have resulted in material cost escalation, affecting NCR real estate trends
- Energy Costs: Rising fuel prices have further inflated costs, directly impacting construction projects
Impact on Construction Costs and Project Timelines
- Construction costs have risen by 10-15%, contributing to the price rise in NCR properties
- Developers are facing delays in project timelines, as they adjust to higher expenses
- Extended project timelines are shifting homebuyers’ preferences towards ready-to-move-in properties
How Rising Costs Are Impacting Developers
The impact of raw material prices on real estate has forced developers to adopt innovative strategies to cope with rising costs. These changes are reshaping investment in NCR housing market projects and influencing behaviour of homebuyers and investors.
Strategies Developers Are Adopting to Manage Rising Costs
- Cost Optimisation: Developers are incorporating new technologies and alternative materials to minimise construction cost increases
- Bulk Procurement: They are securing raw materials in bulk, to hedge against future cost escalations
Shift Towards Pre-launch and Under-construction Sales
- Pre-launch sales have become a vital strategy to maintain cash flow and to fund construction, amidst rising raw material costs
- Developers are leveraging under-construction properties to attract buyers, sustaining liquidity in a competitive market
Increase in Property Prices
- Property prices NCR have risen by 8-10%, reflecting the developers’ response to rising costs and market conditions for real estate
- Buyers are witnessing a real estate price surge across NCR, with significant increases in Gurgaon and Noida property markets
Read More: How to Check Occupancy Certificate Online in Gurgaon, Haryana
Impact on Homebuyers
The impact of raw material prices on real estate and escalating property prices NCR are reshaping homebuyer behaviour. Families are taking strategic decisions to secure their dream homes, while minimising future financial risks. These dynamics highlight the urgency and changing preferences in the evolving real estate landscape.
Homebuyers Rushing to Secure Properties
- Many families and investors are acting quickly to purchase properties before further price hikes, driven by concerns over rising costs
- The housing market has seen a surge in transactions, particularly in areas like Gurgaon and Noida, where property values are climbing steadily
Preference for Ready-to-Move-In Homes
- Rising construction cost increases and project delays are promoting the sale of ready-to-move-in properties
- These homes offer certainty in terms of delivery timelines and eliminate risks associated with under-construction projects impacted by material cost escalation
Influence of Government Subsidies or Schemes
- Government initiatives, such as subsidies under the PMAY scheme, have bolstered affordability for first-time buyers
- These schemes are helping offset rising property prices, particularly in mid-segment housing, by providing financial relief and promoting homeownership
Demand Dynamics Across Segments
NCR real estate market is experiencing diverse demand trends across luxury and mid-segment housing categories. Buyers’ preferences reflect a mix of lifestyle aspirations, investment potential, and evolving priorities.
Demand in Luxury and Mid-segment Housing
- Luxury Housing: Strong demand for luxury apartments in NCR, particularly in Gurgaon and Noida, has been observed – as high-net-worth individuals seek premium living spaces and curated amenities for all age groups in gated communities
- Mid-segment Housing: This segment remains popular, with increased activity in integrated townships offering modern facilities and convenience
Growth in Gated Communities and Integrated Townships
- The demand for gated communities and integrated townships is on the rise, driven by buyers seeking security, privacy, and a self-sustained lifestyle
- These developments are especially popular in Gurgaon and Noida property markets, offering a blend of residential and commercial spaces
Interest in Sustainable and Energy-efficient Housing
- There is growing interest in sustainable housing, with buyers prioritising energy-efficient homes that reduce long-term utility costs
- Developers are incorporating green building practices and renewable energy solutions to meet the evolving preferences of eco-conscious buyers
Investment Perspective: A Booming Opportunity
NCR housing market is emerging as a hotspot for real estate investment, driven by surging demand and rising property values. Investors are recognising the potential for exciting returns, making this region a preferred choice for both short-term gains and long-term wealth creation. With evolving market dynamics and infrastructure advancements, NCR is poised to remain a top destination for real estate investment in 2025-26.
Why Investors Are Capitalising on the Surging Demand
- High Demand Across Segments: The consistent demand for properties, from mid-segment housing to luxury apartments in NCR, offers diversified investment opportunities
- Rising Property Prices: Investors are leveraging the upward trend in property prices NCR, fuelled by rising raw material costs and market demand
- Rental Yields: The demand in NCR real estate has led to increased rental values, making the region attractive for buy-to-let investors
NCR as a Preferred Location for Real Estate Investment in 2025-26
- Strategic Infrastructure: Major developments like expressways, metro expansions, and IT parks are enhancing connectivity and attracting investments
- Key Hubs: Gurgaon and Noida continue to dominate as investment hubs, driven by a mix of luxury housing projects and commercial spaces
- Market Stability: Despite rising construction cost increases, NCR real estate market remains resilient – offering stability and growth potential to investors
Long-term ROI Potential Amidst Rising Property Values
- Appreciation Potential: Property prices NCR are expected to grow significantly, ensuring long-term ROI for investors
- Emerging Areas: Locations like Greater Noida and Dwarka Expressway are gaining traction, offering good entry points and promising returns
- Sustainability Trends: Investments in sustainable and energy-efficient housing are likely to yield higher returns, as buyer preferences shift towards eco-friendly options
Read More: Buying vs Renting an Apartment in Gurgaon
Challenges and Concerns
While the NCR housing market offers excellent opportunities, it is not without challenges. Investors and homebuyers need to navigate these concerns to take informed decisions.
- Impact of Raw Material Prices on Real Estate: Rising cost of cement and steel is inflating construction expenses, leading to higher property prices
- Project Delays: Supply chain disruptions and material cost escalation have caused delays in projects, particularly in under-construction properties
- Regulatory and Policy Changes: Changes in government regulations or taxes could impact the market, creating uncertainties for investors and developers alike
- Competition in High-demand Areas: Popular markets like Gurgaon and Noida face intense competition, which may limit the availability of high-potential properties
Conclusion
The NCR housing market stands as a dynamic and resilient sector – shaped by surging demand, rising raw material costs, and evolving buyer preferences. While challenges persist – such as construction cost increases and project delays – the region’s growth potential remains undeniable.
Homebuyers are capitalising on government schemes and prioritising ready-to-move-in options, while investors are drawn to the long-term ROI offered by rising property values and strategic infrastructure developments. As NCR continues to evolve into a hub for luxury apartments, mid-segment housing, and eco-friendly living options, it reaffirms its position as a preferred destination for real estate investment in India.
By understanding market trends and navigating challenges wisely, you can unlock immense opportunities in this booming market. The future of NCR real estate is poised for sustained growth, making it a promising landscape for buyers and investors alike.
FAQs
1. Why are raw material costs rising in NCR's housing market?
Raw material costs in NCR's housing market are rising due to inflation, supply chain disruptions, increased energy prices, and shortages of essential materials like steel & cement.
2. How does the rising cost of raw materials affect property prices NCR?
The rising cost of raw materials affects property prices NCR due to increasing construction expenses, which developers pass on to buyers through higher property rates.
3. Which segments of the housing market in NCR are seeing the highest demand?
Segments of the housing market in NCR that are seeing the highest demand are luxury apartments and mid-segment housing, with gated communities and integrated townships gaining popularity.
4. How are developers managing rising raw material costs in NCR?
Developers are managing rising raw material costs in NCR by adopting cost optimisation strategies, bulk procurement, and pre-launch sales to maintain cash flow while adjusting property prices.
5. Are homebuyers in NCR affected by the rising raw material costs?
Homebuyers in NCR are affected by the rising raw material costs through increased property prices and delayed project timelines, which has led to preference for ready-to-move-in homes.
6. What types of properties are most in demand in NCR currently?
Types of properties most in demand in NCR currently include luxury apartments, mid-segment housing, and sustainable homes, reflecting buyers’ focus on quality, amenities, and energy efficiency.
7. Is it a good time to invest in NCR’s housing market despite rising costs?
Yes, it is a good time to invest in NCR’s housing market despite rising costs, due to strong demand, increasing property values, and long-term ROI potential in high-growth areas like Gurgaon and Noida.
8. Will the rising raw material costs lead to a slowdown in the NCR housing market?
No, the rising raw material costs are unlikely to lead to a slowdown in the NCR housing market, as strong demand and infrastructure development continue to drive growth.
9. What government policies are in place to help buyers cope with rising property costs?
Government policies in place to help buyers cope with rising property costs include schemes like PMAY that provide subsidies for affordable housing and promote homeownership.
10. How long is the rising cost trend expected to continue in NCR?
The rising cost trend in NCR is expected to continue in the short term due to supply chain challenges and inflation, but may stabilise by 2025-26.