If the National Housing Bank’s (NHB) Residex is anything to go by, there’s been too little to rejoice for the country’s real estate market in the past two years.
In the dismal growth rate registered compared to the previous year, only Mumbai, with 12% rise, has witnessed a double-digit growth in property prices among four metros and five Tier-II cities. In Gujarat too, the scene is no different, with only Ahmedabad and Surat, the two prime cities, registering 6 and 5% growth, respectively.
The NHB’s Residex revealed that the July-September quarter shows that out of 26 cities covered under the index, 10 cities, including Delhi, Indore, Jaipur, Bhopal, Bengaluru, Bhubaneswar, Ludhiana, Vijaywada, Meerut and Nagpur witnessed slide in property prices.
On the other hand, Pune, Kochi, Dehradun and Coimbatore witnessed no change and only 12 cities including Mumbai, Ahmedabad, Surat, Hyderabad witnessed marginal appreciation during the second quarter 2013-14.
Last year, the growth rate in property prices had slowed down in all major cities, except Mumbai which recorded double digit growth in property prices. However, the maximum city witnessed only 2% growth between July-September, 2011 and July-September, 2012. Similarly, Bengaluru and Pune followed the metro with around 9% growth.
Ahmedabad witnessed only 6% growth in property prices in last one year. The property price index in the city has remained volatile in last one year. The index was at 180 points in July-September quarter 2012, which increased to 191 in October-December quarter. However, Residex went down to 186 points in April-June 2013 quarter and reached 191 in July-September quarter 2013.
“The market remained stable for last one year. The situation is not likely to improve in near future as the general elections are round the corner,” said Pravin Bavadiya, vice president of National Association of Realtors-India (NAR-India).
Echoing similar sentiments, area manager of GIC Housing Finance Ltd, Mukesh Kumar said people across the country, particularly the middle class, are suffering from inflation. “While property prices have gone up because of hike in input costs, the income of the middle class has not increased to match the prices,” said Kumar.
In Ahmedabad, improvement in Residex is mainly due to the central zone. The west zone, including areas like Thaltej, Bodakdev, Vastrapur, Vejalpur, Ambi, Bopal, Chandkheda among others, has witnessed continuous correction in prices for last three quarters. “The west zone is oversupplied, so prices have gone down in these areas,” said Bavadiya. The bankers also believe that property prices in Ahmedabad have been out of reach of common people, so the developers will be forced to reduce the prices. “There is a huge inventory in residential market which has created pressure on the developers,” a banker said on condition of anonymity.
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