A quarterly review of residential property prices in India indicates that numbers are rising across the country. The National Housing Bank RESIDEX index shows increases of up to 10% in 16 of 20 major Indian cities. Pune saw a 10.5% increase in the second quarter of 2012, followed by Bengaluru and Patna. Other areas up on the quarter were Bhopal, Chennai and Jaipur. Analysts attribute the gains to infrastructure improvements, but critics argue that the government should be doing more to spur the development of more affordable homes and lowering interest rates. For more on this continue reading the following article from Property Wire.
Residential property prices increased by up to 10% in many major cities in India in the second quarter of 2012, the latest data from the National Housing Bank shows.
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.
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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.
This article was republished with permission from Property Wire.