30.7.14

Residex : Jan-March 2014



Delhi's apparently ever increasing property prices finally seem to have hit a plateau. The National Housing Bank's property price index shows a marginal decline of 1.5% in residential property prices in the city in January-March 2014 compared to last year. NHB's Residex, devised to track prices of properties in major Indian cities, reflected the same trend in 13 of 26 major cities.
Second-tier cities took the worst hit -the steepest fall being in Meerut, where prices dipped by 13.6%.
The index, however, shows that there is no overall slump in the country's residential property market as the 13 other cities tracked by it saw prices rising. Surat, Chennai and Nagpur show the highest increase with house prices up by 10% or more over a year. Prices were up between 5% and 10% in Pune, Lucknow, Raipur, Hyderabad and Ahmedabad.
Prices fell by 13.6% in Meerut, the steepest among the 26 cities. Ludhiana and Vijayawada, too, witnessed a 10% decline in prices of residential properties. Property was over 5% cheaper in Jaipur, Coimbatore, Indore and Chandigarh too when compared to January-March 2013.
Residex ultimately aims to track the movement of property prices in all 63 cities covered under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), but currently tracks only the residential housing sector. The data is collected from real estate agents, housing finance companies and banks.
Among the cities where property prices rose between January and March 2014, Surat, Chennai and Nagpur all posted increases of 10% or more over a year. Property prices rose by between 5% and 10% in Pune, Lucknow, Raipur, Hyderabad and Ahmadabad. Guwahati, Faridabad, Mumbai, Dehradun and Kolkata saw more modest increases in residential property prices.
Overall, property seems to be a safe investment as in the seven years for which the Residex data is available, prices have appreciated in 24 of 26 cities. Compared with 2007, only Kochi and Hyderabad have witnessed a dip in prices; Jaipur and Bangalore have more or less remained stagnant. There are seven cities which have witnessed more than 100% increase in property prices in the past seven years.
In terms of investment in property, Chennai would have yielded the best returns over the seven-year period as prices were up 249%. Prices have also more than doubled in Kolkata, Faridabad, Ahmedabad, Bhopal, Mumbai and Pune.

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