Indian real estate presents a vivid picture. The metropolitan cities of India are giving tough competition to famous cities of the world. Property prices of some Indian cities are more than New York and Washington. Growing population is raising the demand of residential real estate. Existing cities are expanding and barren areas are converted into townships and urban centers. Commercial and residential realty is drawing genuine buyers and investors. Foreign Investment in Real estate of India is also witnessed.
Fluctuations in Property Prices
Property prices in the residential segment keep fluctuating depending on the demand and supply. In a recent property price survey, the Indian cities show a mixed trend. According to National Housing Bank, property prices have shown an upward trend in 9 cities of India. Also surprising are those 11 cities including metropolitan Kolkata and Bangalore witnessed a decline.
The National Housing Bank data presented the property rates for July-September 2012. In this quarter, 11 metropolitan cities and urban centers had a decline in prices. Up to 5% dip is reported in these cities. Property prices for residential units also increased in 9 cities by 10%.
9 Cities witnessed Price Rise
The maximum gainer for this quarter is the Kochi. The southern city in the state of Kerala experienced a rise in price by 10.1%. Located on the western seacoast, Kochi or Cochin is developing into a realty hub in the state.
The second highest gainer is Jaipur, the pink city. Capital of the princely state of Rajasthan, residential units’ price rose by 9%. New projects launched by property developers attracted the locals and migratory workforce.
Other top gainers include Delhi-NCR, Mumbai and Chennai. According to the National housing board data, the prices of residential segment was hiked by 3.8 per cent, 0.5 per cent and 1 per cent, respectively.
Many are not aware about the function of National Housing Board. NHB RESIDEX records the property price graph across various Indian cities. It comes out with property reports on a quarterly basis. 20 Indian cities, metropolitan as well as developing towns, are part of the report. For the year 2012, the NHB reported the fluctuation in residential prices in 20 cities. It is expected that fro 2013, another 6 cities will part of the list.
The managing director of NHB informed about pricing trends. Property prices in Indian cities in the July to November quarter witnessed an overall correction. The nine cities where the prices have risen are expected to have a net decline in the coming months considering the inflationary trends and input cost. He also commented on the falling prices situation. The reason for cities witnessing dip in residential units is oversupply. Builders are decreasing prices to boost sales and clear inventory.
Other cities in India, which witnessed rise in residential units, are Ahmadabad in Gujarat, Bhubaneswar in Orissa, Chennai in Tamil Nadu and Pune in Maharashtra. These cities saw price rise ranges from 3 % to.7%.
11 Cities shows Decline in Property Prices
The housing demand in the last few years has witnessed fluctuations. The rising home loan rates are affecting the buying of residential properties. Eleven cities of India have shown decline in property prices. Faridabad in Haryana showed a marginal decline by -0.4% whereas in Surat it was by -4.8%.
Other cities where prices fell are Indore in MP at -3.54 per cent, Kolkata in West Bengal by -2.4 per cent, Vijayawada in Andhra Pradesh by -2.4 per cent, Patna in Bihar by -1.8 per cent, Ludhiana in Punjab -1.7 per cent, Bangalore in Karnataka by -1.7 per cent, Hyderabad in Andhra Pradesh by -1.3 per cent, Guwahati in Assam by -0.7 per cent, Bhopal in MP -0.5 per cent.
Signs of convergence in prices across 20 Indian cities are the overall trend as seen from the NHB data. However, according to the real estate watchers, the prices are expected to decline in smaller cities and expected to rise marginally.
Genuine Home buyers will Search for Residential Properties
Whatever is the price situation, genuine home buyers will invest in residential properties. Owing a studio apartment or land for living is dream of many. Though there will be rise in prices, buyers with need will buy an apartment or land. This is more of an emotional decision rather than smart real estate move. Price rise or decline will not influence the first time buyer of residential realty.
Even property developers are coming with offers in cities to lure such customers. They are offering deals to clients on investing in properties in cities. For example, property developers in the Delhi/NCR attract customers with options like modular kitchen, LCD television sets, air conditioners and even wooden flooring in master bedrooms.
Bulk bookings of apartments in residential complexes are another way home buyers can lower the cost price. Property developers offer discounts to customers who book units in same buildings or same project in a group. The prices of apartment are reduced by 500 to 700 per square feet. This reduces the overall apartment cost, thus making customers happy. Even the builders benefit from such bulk bookings.
In India, the top residential hubs are Delhi/NCR, Navi Mumbai and its planned townships, Bangalore and Mysore in Karnataka, Kolkata’s Rajarhat and New Town and Ahmadabad in Gujarat. Other cities becoming a part of the realty movement in India are Ludhiana, Chandigarh, Lucknow, Jaipur, Pune, Kochi and Surat.
In conclusion, it can be said that real estate of India is booming despite the slight fall in prices in some cities. Land being limited in the cities, new townships is planned including commercial options. NRIs investing in the country’s residential properties are proof of the good returns from Indian realty.