Mumbai, Delhi properties witness maximum price-hike: NHB
According to the National Housing Bank (NHB) Residex, the last quarter of 2012 saw rise in residential property prices across 18 of the 20 cities covered. Major Indian cities like Mumbai, Delhi, Bangalore, Ahmedabad, Kolkata and Chennai witnessed significant increase in the same.
The cities which reported maximum growth in residential property prices quarter-on-quarter are Mumbai and Delhi with 9.6 percent. This is followed by Kolkata (9.4 percent ), Patna (9.4 percent), Kochi (8.8 percent), Surat (8.7 percent), Bangalore (8.2 percent), Lucknow (8 percent), Hyderabad (7.1 percent), Ludhiana (6.5 percent), Ahmedabad (6.1 percent), Guwahati (5.1 percent), Bhopal (4.9 percent), Bhubneswar (2.4 percent), Jaipur (2.4 percent), Vijayawada (2.2 percent), Pune (2.0 percent) and Chennai (0.6 percent).
According to the Chairman and Managing Director of NHB, these cities saw restricted supply of residential projects in last quarter (Oct-Dec 2012). It is because the builders wanted to clear their existing inventory rather launching fresh projects. However, this hasn’t affected the demand, in fact, demand kept on rising, which might have contributed to the price increase.
The rise in input cost (including labour costs) for developers, sustained economic slowdown, increased interest rates may also have affected the prices. The MD of NHB added that improved infrastructure development also attracted many investors which resulted in property price hike.
Indore and Faridabad are the two cities which saw fall in home prices by -1 percent and -5.1 percent respectively.
As per experts, the prices have increased due to infrastructure development in certain cities and in hope of a favourable budget.
According to the director of the largest professional services company, KPMG, the upcoming budget would assist the real estate industry. There is an overall positive sentiment seen among buyers as they want to grab the best deal before property prices rise further. This entire scenario has pushed property prices up.
He added that micro-markets also contributed to property price hike. The residential projects in micro-market areas such as Golf Course Road in Gurgaon, Yamuna Expressway in the National Capital Region (NCR)and Navi Mumbai generated healthy demand from retail buyers, which in turn have pushed the prices up.
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