Mumbai and New Delhi are among cities in India that recorded a sharp annual increase in their real estate prices in the first quarter of 2024, according to a report by London-headquartered global property consultancy firm Knight Frank.

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In case of Bengaluru, the average real estate prices witnessed a modest 4.8 per cent rise in prime residential or luxury homes during the January-March quarter of 2024.

According to the report by the property consultant, titled 'Prime Global Cities Index Q1 2024', Mumbai's significant 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 has been a rise in the sale of higher value products.

Mumbai recorded the third highest year-on-year 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.

Delhi NCR rose from 17th rank in Q1-2023 to 5th in Q1-2024 with a growth of 10.5 per cent on a yearly basis. However, Bengaluru observed a slight decline in ranking from 16th place in Q1-2024 to 17th rank in Q1-2024, even while it recorded a 4.8 per cent yearly growth in residential prices.

India's main cities, notably New Delhi and Mumbai, have witnessed a surge in house prices driven by robust economic growth, with annual GDP growth exceeding 8 per cent in the just concluded financial year 2023-24.Manila, the capital city of Philippines, claimed the top spot in the ranking with a 26.2 per cent annual rise in prices. The growth, as per the Knight Frank report, can be attributed to two key factors: purchasing power, and substantial infrastructure investments within and around the city.

Tokyo in Japan jumped 17 places up with 12.5 per cent yearly price growth and ranked 2nd in the index. Despite Japan's overall population decline, Tokyo sustains a net population growth owing to migration from other regions within the country.

Shishir Baijal, Chairman and Managing Director at Knight Frank India said, "The strong demand trend for residential properties has been a global phenomenon, led by gateway markets of Asia- Pacific and EMEA (Europe, Middle East, and Africa)."

"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."

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.