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Luxury apartments in Mumbai record 1.1% price growth

Experts said that the luxury home markets in India’s metros were still recovering from the demonetization drive

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Mumbai was ranked 24th among 41 cities globally with 1.1% price rise of luxury homes for the year ended March 2017, property consultant Knight Frank India said on Tuesday. Guangzhou in China was first in the global list of 41 cities with a 36.2% price growth.

The small base size and limited residential inventory could have catapult Guangzhou to the top of the table with a whopping price growth of 36.2%, the report added. Shanghai, often a cited as a model city for Mumbai also recorded a healthy 19.8% surge on the price card.

Dr Samantak Das, chief economist and national director, Knight Frank India, said that luxury home markets at major Indian metros were probably still recovering from the short-term shocks of last year’s demonetization drive.

“From nearly a year to year price growth of 3% until two years back, the prime residential market in Delhi has seen negative growth of almost similar measure in the quarter-ending March 2017. Likewise, from a staggering year to year growth of 13.6% in 2015, Bengaluru recorded negative growth for the first time in five years,” said Das.

Das added that Mumbai, is holding to a positive price growth albeit, in a declining trend. Globally financial hubs such as Zurich (-7.0%), London (-6.4%) and Milan (-0.9%) have recorded negative growth.

“Mumbai did better than many global financial centres but the price growth in the quarter-ending March 2017 has taken it back to Q1 2013 levels after touching a high of 3.2% price growth in 2015,” added Das.

Emerging tech hubs such as Seoul (17.6%), Stockholm (10.7%), Berlin (8.7%) and Melbourne (8.6%) outshone established global financial centres the index shows, but price growth in Bengaluru, India’s IT capital was not in sync with the global trend. Property prices in the US also saw a steady surge but luxury home rates in Toronto spiraled (22.2%) almost three times of Vancouver (7.9%).

Select Asian cities such as Hong Kong (5.3%) and Singapore (4%) fared better following years of ordinary performances. Although prime rate in London fell by a sharp 6.4%, the performance in in the quarter ending March 2017 indicates stabilisation.

Anand Gupta from Builders Association of India said that the input cost of the housing has gone so it will naturally reflects on the prices of the apartments. "Govt keep on bringing taxes that cost has ultimately recover from the buyers. The market is now end-user driven so there is healthy growth in the market. Mumbai is compared with the international cities but it still lacks infrastructures.  Once the infrastructure is developed, the Mumbai city will even witness the more positive growth " Gupta said.

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