Home prices not rising sharply any more

A lack of demand is finally hitting Indian home prices, shows new data from RBI

A lack of demand is finally hitting Indian home prices, shows new data from the Reserve Bank of India (RBI). Annual increase in home prices dropped close to a 12-quarter low at the end of the last financial year. The average home price in the March quarter increased 11.4% from a year ago, but as the chart shows, this trend has been a long time in the making. The central bank has collated these numbers from home sale registrations in various states.

The cities that bucked the trend are those in the south. Kochi boasted the highest rate of price rise at 33% although that was a comedown from 38% in the previous quarter. Chennai, Bangalore and Lucknow, however, showed a pick up in momentum.

Big is better when it comes to an appreciation in home prices, the RBI data show. Small home prices rose only 2.9% compared to 19% for the largest. These groupings are based on relative floor size areas. However, that is mostly owing to the base effect. Prices in the smallest category grew at an average annual rate of 23.7% in the last four years compared to 18% for medium and large homes.

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