If you had invested in a property in the middle of 2010, there is good news for you, if National Housing Bank’s (NHB) residential index is anything to go by.
All the 15 cities that Residex covers have shown an upward trend during the October-December 2010 quarter, according to the recent update. The maximum percentage change between the July-September and October-December quarter has been recorded for Bangalore—at 36%.
Ahmedabad and Kolkata followed Bangalore, with an increase of 16% and 11%, respectively.
In a press statement released on Tuesday, NHB said Bangalore witnessed the highest jump in prices because of growth across information technology or information technology enabled services IT/ITeS, manufacturing, banking and financial services sectors. The growth in these sectors has led to an increase in housing demand from the workforce, in turn resulting in a price hike. Other than this, development of peripheral areas and availability of large tracts of land for real estate development has impacted the pricing in the city.
While Ahmedabad’s residential market is witnessing significant growth because of the expanding job market, Kolkata has registered a rise in values mainly on account of the proposed metro link and new project launches in the affordable and premium space.
Explaining the trend in Ahmedabad and Kolkata, Shveta Jain, director, residential services at property consultant firm, Cushman and Wakefield India, said, “During the property slump, the rates declined sharply. The recovery in these cities was slow paced. It is only with the new launches that property prices have come back to the previous levels.”
Apart from smaller metro cities, Delhi recorded an increase of 8% and Mumbai witnessed an increase of 4%. Explaining the moderate rise in Delhi and Mumbai, Jain added, “Both the cities have seen projects mostly in the affordable and mid-range segment. So there is little room for further appreciation. Also, supply in peripheral areas and satellite towns in Delhi and Mumbai have been more than the required demand. So the price movement has been slow.”
All the tier II cities except Patna and Hyderabad have shown an increase in rates.
NHB publishes its residential index every quarter. The values on the Residex are derived from actual transactions prices for various administrative zones and property tax zones within the cities.
The base of the Residex has been kept as 100 points. Any movement in the price band in a particular city is denoted by an increase or decrease over the 100 base points.