Non-metro cities such as Jaipur, Pune, Lucknow and Ahmedabad saw a double-digit growth in residential property prices in the second quarter of 2012-13 against the corresponding quarter last year. But cities like Mumbai and Bangalore displayed a muted growth, according to the latest Residex by the National Housing Bank (NHB). Residex is an index of property price changes across select Indian cities.
The latest Residex trend could be attributed to increased demand in non-metro cities and the low base of these cities. Eleven out of 20 cities showed a decline in the index compared to the previous quarter. Jaipur recorded a 30.7 per cent growth in the second quarter of the financial year against the corresponding quarter last year. In fact, even on a quarter-to-quarter (q-o-q) basis, Jaipur topped the list and property prices zoomed 8.9 per cent. “The infrastructure development in Jaipur could be the reason for such high growth in residential property prices,” said R V Verma, chairman and managing director, NHB. He added it was a combination of genuine demand in the Jaipur residential market and also investor demand.
Pune saw a growth of 18.9 per cent on an annual basis, and 0.7 per cent q-o-q. Lucknow recorded a 13.6 per cent annual growth in residential property prices and 2.3 per cent q-o-q. Ahmedabad recorded a 10.4 per cent growth year-on-year and three per cent on a quarterly basis.
Of the metros, Delhi recorded a rapid 15.58 per cent growth in the second quarter on an annual basis. This could be due to the fact that Noida and Gurgaon were incorporated as part of Delhi in the index this calendar year onwards. Gurgaon and Noida are the two vibrant markets, and have seen a price appreciation of about 20 per cent in the last one year, according to industry estimates.
On a quarterly basis, Mumbai on the other hand saw a 0.5 per cent growth in the second quarter versus the first quarter and 2.06 per cent growth versus the year-ago period.
“The Mumbai market is saturated at the moment, and also has a high base in the index,” said Verma. According to a recent report by international property consultant Jones Lang Lasalle, demand in Mumbai’s residential market improved in October, primarily on the back of the attractive pre-launch offers extended by select developers.
Bangalore saw a 5.3 per cent increase compared to last year, but 1.7 per cent contraction versus the previous quarter.
NHB plans to add six more cities to the Residex from the fourth quarter of 2012-13 onwards-Nagpur, Raipur, Chandigarh, Dehradun, Meerut and Coimbatore.