Property market rejoices as Property Prices increase in most of the Indian cities and Sub-cities: Makaan.com Property Index (MPI)
Makaan.com Property Index [“MPI”] for Oct-Dec 2014 brings good news for the real estate industry that has been experiencing the absence of buyers for quiet some time.In the present year, the government has taken quite a few initiatives to promote homebuyers to invest in properties. The Union Budget made a declaration of increasing the home loan exemption limit from 1.5 to 2.5 lakhs, RBI slashed down its key interest rates making the home loans cheaper, FDI relaxation in construction and talks of facilitating affordable housing.
The real estate market in India has started to show increase in property prices. The prices are now showing a rapid upward trend. The Oct-Dec 2014 MPI portrays that the national trends are favorable for the Property investors and real estate industry players As per the latest release of Makaan.com Property Index (MPI) for October- December quarter, property prices have risen in six out of nine Indian cities and four out of six sub -cities There increase in the national index with prices going up by whopping 8.3%. Price index for Mumbai, Delhi, Kolkata, Bangalore, Ahmedabad, Pune, Mumbai Thane, Navi Mumbai, Gurgaon and Noida showed a positive trend. Prices in these markets moved up in the range of 15.8% to 2.1% over the last quarter. On the other hand, prices in Hyderabad, Chennai, Faridabad and Ghaziabad have stabilized whereas prices in Chandigarh have gone down.
Let’s take an insight into the MPI for October- December 2014 at National, City and Sub-cities level
On the National level the Prices for properties shows a positive trend. The latest figures for Oct- Dec 2014 from the real estate market research and analysis point to a nation-wide increase of 8.3%. This means, the property prices for the quarter have up by 8.3%, this news brings relief to property investors and industry players.
Positive price trend in Mumbai, Delhi, Kolkata, Ahmedabad, Pune, Mumbai Thane, Navi Mumbai, Gurgaon and Noida
The Mumbai MPI has shown the maximum increase in the index. A huge increase of 15.8% has been witnessed over the last quarter. Interestingly in the previous quarter the city had shown a whopping depreciation of 12.9% in property prices. But, this quarter was marked by renewed interest among investors and home buyers in making long term high value purchase decisions. On an annual basis too the city prices have increased by 7.9%
The Delhi MPI has shown an increase of 7.7% over the quarter, which is second highest in the country. This could be because of hike in circle rates of Delhi, which made the property prices of the city rise. However, the index for Delhi NCR has been trending downwards and on an annualized basis the prices in the city have dropped by 5.7% in the last one year.
The city of Pune has shown a property price rise of 2.1%. The city continues to attract IT & ITES talent from across the country and companies are setting up offices here to take advantage of the cost arbitrage over Mumbai.
The cities of Ahmedabad and Kolkata have also shown a decent appreciation in property prices with an increase of 6.2% and 3.8% respectively. Both these cities started to show an upward trend and it needs to be seen if this trend is carried forward.
Mumbai Thane prices have appreciated by 3%. Mumbai Thane continues to attract talent from across the country and companies are setting up offices here to take advantage of the cost arbitrage over Mumbai. MPI data indicates that the property prices in Mumbai Thane have remained stable on the monthly and annual basis.
For Oct-Dec 2014, Navi Mumbai MPI shows an increase of 6%. In the three months the city has seen a considerable appreciation in property prices. There can be a further appreciation in property prices in the region as Navi Mumbai property rates are very competitive.
For the quarter Gurgaon MPI shows a whopping increase of 12%. The city has a good investment potential as it hosts several business hubs and corporate houses. In the coming months also the city's property prices might witness good appreciation.
Noida is the has shown an upward trend. The sub-city started to show a huge increase of 8% in this quarter. It needs to be seen if this trend is carried forward. Availability of unsold inventory has put a lid on the property prices and a sustainable increase is possible only if there is good absorption level in the coming months.
Stability in Bangalore, Hyderabad, Chennai, Faridabad and Ghaziabad
Bangalore stabilized MPI over the quarter as the prices for the city have increased by just 1.1%. The homebuyers should be on a look out as the property prices in Bangalore will probably tend to be stabilized and maintain their high-end investment potential over the next few months.
The city of Chennai, has reported a flat index with prices down at a negligible 0.9%. It will be interesting to see in which direction the city will move in the coming months. On an annualized basis Chennai reported a 7.8% increase in prices. The short term trend for the city is encouraging.
Hyderabad index shows a small decrease of 1.1% in property prices. The property prices for the city have been stabilized and home buyers in the region can look to invest in Hyderabad properties.
For Oct- Dec period, Faridabad MPI shows a decrease of 1%. The sub-city of Delhi has been moving sideways for over a year now. It will be interesting to see in which direction the sub-city moves in the coming months. On an annualized basis Navi Mumbai reported an increase of 12%.
Ghaziabad index shows a small increase of 1% in property prices. The increase is not much as a shift under 2% is generally seen as stabilized. The property prices for the sub-city have been stabilized for quiet some and home buyers in the region can look to invest in Ghaziabad properties.
Negative price trend in Chandigarh
Chandigarh has shown a dip of 5.0% over the quarter. This means that this might be the best time for investing in the market. The third quarter of the year has brought good news for the home buyers of the joint capital this only means that the coming months might experience a further reduction or stabilization of prices.