Residential property prices up in 16 out of 20 key Indian cities, figures show

The NHB ‘RESIDEX’ index, which tracks the movement in prices of residential properties on a quarterly basis since 2007 shows that 16 out of 20 have seen values rise. ‘Residential housing prices in 16 cities have shown rise in prices in this quarter ended June, 2012 over the previous quarter ended March, 2012,’ the NHB said in a statement. The biggest house price increase was 10.5% in Pune, followed by 8.7% in Bengaluru, 8.6% in Patna, 6.4% in Ahmedabad and 5.3% in Ludhiana. Housing prices also rose by 4.1% in Lucknow, by 3.7% in Mumbai, by 2.6% in Delhi and in Kolkata, while Bhubaneshwar, Bhopal and Chennai all experienced 1.7% price increases. Smaller increases were found in Surat and Guwahati, both up 1.2% and in Vijaywada and Kochi, both up by 1.1%. However, property prices fell by 2.6% in Jaipur, by 2.4% in Indore and by 1% in Hyderabad, while prices in Faridabad remained stable. Housing prices are likely to largely remain stable, according to NHB chairman and managing director R V Verma. He added that local factors such as infrastructure improvements seem to be the main influence on markets at present. Meanwhile, the country’s real estate organisation, CREDAI, has said that it is unrealistic on the part of the government to expect developers to cut housing prices and demanded that steps should be taken to boost supply of affordable homes. President Lalit Jain said that the industry is glad that the government recognises that a boost in the real estate market will help the weakening economy but this can only happen if cosntruction costs are brought down and people encouraged to buy their own homes. He pointed out that the government should focus on bridging the demand/supply gap by lowering the rates of interest and suggested that home loans be given at 7% for lower income groups. ‘Banks and finance companies are still wary of financing the real estate sector,’ he added.