Real estate prices in India are moving in both directions and are dependent on current and prospective business and infrastructure activity, according to a National Housing Bank Residex report examining property values in 15 Indian cities. The city of Chennai, and particularly its business district, is experiencing the most activity according to the survey, with limited supply and large demand driving prices up in the central business area. Areas in the north like Tondiarpet and Perambur, however, are experiencing price falls. Districts in the western part of the city are also falling, and some areas have reported losses of nearly 10% for the quarter. For more on this continue reading the following article from Property Wire.
There is a mixed picture in the Indian residential property market at present with some locations seeing prices and sales rise while they are falling in others.
Chennai’s central business district has seen the highest price increases due to surging demand, according to NHB Residex, an RBI-supervised mechanism that tracks housing prices in 15 cities.
However, prices in North Chennai, most notably Tondiarpet, Perambur, Dr Radhakrishnan Nagar and Narayanappa Garden, saw a fall due to slow infrastructure development.
Despite the economic slowdown, high interest rates and inflation, prices of houses in the city’s hotspots of Anna Nagar, Kilpauk, Nungambakkam, T Nagar and Adyar have been rising. Prices in areas close to Nehru Nagar, Chepauk and Marina rose 62% compared to the quarter ending in June.
‘Chennai’s residential market is expected to see unabated growth during the next few quarters. Active demand will be concentrated in locations closer to the city centre,’ said a recent report Cushman & Wakefield. House prices in Chennai have jumped 9% in the third quarter compared to the June quarter.
Prices in Virugambakkam, Anna Nagar, Kilpauk and Nungambakkam have quadrupled since 2007, when the National Housing Bank (NHB) begun the Residex for Chennai. The demand for residential units in Chennai is likely to see a compounded annual growth rate of 11% during 2011 to 2015.
Real estate consultants blame limited supply and huge demand for property for the surge in prices in the central business district. The city, awaiting the metro rail, monorail and extension of MRTS, will continue to see demand for property near these infrastructure developments, and a surge in prices seems natural, they believe.
But a slowdown in demand for residential properties has affected Ahmedabad’s real estate market. The latest quarterly Residex figures point towards an overall dip of 4% in real estate prices for the third quarter compared with the previous three months.
But other areas like Prahladnagar, Ambli, Bopal, Jodhpur, Satellite, Solagam, Shilaj road, Vastrapur, Vejalpur, Ambawadi and Chandkhedagam has seen 5.46% in the same quarter.
The western part of Ahmedabad has seen a rise prices largely due to upcoming car plants on the Sarkhej-Sanand stretch, and the metro rail project.
But in the western zone that prices fell by 9.38% between January and September this year while the northern part of the city such as Buddhnagar, Saijpur-Bhoga, Sardarnagar and Vishnunagar prices have increased by 10.77%.
The central zone saw a rise of 7.51%, which includes areas like Bhadra, Dudheshwar, Gaikwad Haveli, Girdharnagar and Wadigam. The steepest fall in real estate prices was in south zone at 26.11%.
This article was republished with permission from Property Wire.