Prices of residential properties in cities on rise
The prices of residential properties in prime cities of India in the Jan-March 2013 quarter have witnessed an upward trend, shows National Housing Bank (NHB) residential index (Residex). NHB Residex records the movement in prices of residential properties on a quarterly basis.
NHB Residex presently covers property price data of 20 cities on a quarterly basis since 2007. It will add six more cities to the list from the quarter January-March 2013, namely- Chandigarh, Coimbatore, Dehradun, Meerut, Nagpur and Raipur. NHB RESIDEX to 63 cities covered under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The coverage of these mission cities will make NHB RESIDEX a national index.
The property prices in 12 of the total 20 cities observed an increasing slope, ranging from 0.52 percent to 28.74 percent. Jaipur with 28.74% stood first among them followed by Bhubaneswar with a hike of 14.54% and Pune with 7.81% hike. Bhopal which witnessed 6.49% hike stood at fourth place while Delhi- 3.59%, Bengaluru- 2.83% and Mumbai- 2.31% stood fifth, sixth and seventh respectively. The index for Delhi also includes property transactions in NCR including Gurgaon, Noida, Greater Noida and Ghaziabad.
As per the NHB data, during the Oct-Dec 2012 quarter, Hawa Mahal and Sanganer zones in Jaipur have recorded good growth while the East and West zones have largely contributed to the realty growth of Bhubaneswar. In the same quarter, the central and west zones had recorded high growth in Pune.
However, the quarterly update of NHB has reported that the remaining eight of the 20 cities witnessed a correction during first quarter of 2013 with the property prices going down. The maximum fall was seen in Guwahati (7.84%) followed by Ludhiana (6.71%), Surat (6.67%), Kolkata (5.75%), Lucknow (3.18%), Hyderabad (2.23%) and Chennai (1.28%).
The six new cities, that were added in the Residex from quarter ending March-2013, saw tremendous rise in the property prices compared to the base year 2007. The maximum increase was recorded in Chandigarh (94%) followed by Meerut (91%), Coimbatore (84%), Dehradun (83%), Nagpur (63%) and Raipur (56%).
As per the NHB data, last quarter of 2013 witnessed significant rise in prices of residential properties compared to the previous quarter when they either remained stable or increased slightly.
On the other hand, the recently released report by global real estate consultancy firm Cushman and Wakefield (C&W) states that, the return on investment (ROI) in residential real estate in India will be lower in the range of 10 to 20 percent in 2013-14 compared to 30 to 40 percent in 2012-13.
Since the inventory of unsold housing units is piling up with numerous new projects being launched and several more are under construction in various cities. This would further lower the returns in residential realty market. However, some areas are still observing strong sales due to high demand and limited supply. Such areas would continue witnessing rise in property prices over the next one year.
The capital values of properties in NCR are likely to remain constant in 2013-14. Gurgaon seems to witness rise in capital values with quite a few projects close to completion and launch of new projects at higher prices.
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