Property Prices Increases By Up To 22% In June Quarter, Shows NHB Residex

Many declared that India's real estate market, which was trying to limp its way back to recovery, has received a severe blow in the form of a note ban that was announced on November 8, 2016. Of all the things that were ruled out was the possibility that there could be any upwards movement in property prices after demonetisation. Data released by the National Housing Board (NHB) later proved that prediction wrong. In an analysis that covered the price change in 50 cities between October-December (December quarter of the third quarter of the financial year 2016-17 or Q3'17) and January-March (Q4'17), more than half of the cities, 26 exactly, saw property prices rising.

The combined effect of the real estate law and the goods and services tax was also not enough to stop the rates from increasing thereafter. According to the NHB Residex, rates of property in as many as 33 cities have increased by up to 22 per cent in the first quarter of the current financial year. While rates fell in the range of up to 13 per cent in 14 cities, they remained stable in three cities. In case of under-construction properties, rates increased by up to 17 per cent in 39 cities while declining by up to eight per cent in eight cities.

This year the price change has been tracked using financial year 2017-18 as the base year.

Where prices went up

A look at the findings of the index shows that some smaller cities are witnessing a better growth in terms of prices when compared to their bigger peers. The sharpest increase in property price during the quarter ended June was seen in Jharkhand capital Ranchi, where rates increased by 21.7 per cent year-on-year (YoY). Other small cities that saw prices going up are Gandhinagar (12.8 per cent), Chakan (10.8 per cent), New Town Kolkata (10.5 per cent), Nashik (8.4 per cent), Surat and Vadodara (7.4 per cent each).

Among the eight Tier-I cities included in the analysis, Gujarat’s economic epicenter Ahmedabad registered the highest price rise at 21.7 per cent. Except Delhi, rates increased in all Tier-I cities, including Hyderabad (9.5 per cent), Pune (7.2 per cent) and Mumbai (5.2 per cent), Bengaluru and Kolkata (2 per cent each). Property prices remained unchanged in Chennai.

At 16.9 per cent, rates of under-construction properties increased the highest in Kolkata during the quarter. In the Tier-III city of Bidhan Nagar, rates increased by 14.4 per cent. Rates of under-construction properties also increased in Hyderabad (6.3 per cent), Mumbai (4.1 per cent), Delhi (4.1 per cent), Chennai (3.1 per cent), Pune & Ahmedabad (2 per cent each) and Bengaluru (1 per cent). Rates also increased in small cities such as Indore (9.7 per cent), Dehradun (8.3 per cent) and Lucknow (7.5 per cent).

Where prices went down

At 13.4 per cent, the sharpest decline was witnessed in Bhiwadi followed by Punjab's industrial hub Ludhiana with 12.3 per cent drop. Rates fell 9.1 per cent in Rajasthan capital Jaipur. In the national capital Delhi, rates of property saw an annual decrease of 4.8 per cent.

At 8.3 per cent, rates of under-construction properties decreased the highest in Faridabad during the quarter. Rates of under- construction properties also fell in Thiruvananthapuram (7.5 per cent), Howrah (4.8 per cent) and Vadodara (3.9 per cent).