Property prices in favor of home buyers: MPI Jan-Mar 2015
The year 2014 saw a cautious approach by property seekers and controlled supply by local and national real estate developers. Sentiments remained subdued and several revival strategies like festive season discounts and inclusion of freebies failed to bring about the desired results. It was a topsy-turvy year for the housing sector and Indian real estate, in general. With the completion of first quarter of 2015, has there been any positive change in order to motivate the home buyers and attract them in the coming months? Makaan.com Property Index [“MPI”] Jan- Mar 2015 projects property prices moving in favour of home buyers.
The race between the cities depicting which city is still showing appreciation in property prices in MPI and which ones have ceased (showing depreciation or stabilization) and are becoming favourable for the home buyers still continues. Let’s us have a look at the MPI for Jan- Mar 2015 at national, city and sub-city level. As per the latest release of Makaan.com Property Index (MPI) for Jan- Mar quarter, property prices have risen in only four out of nine Indian cities and in one out of six sub-cities. The national index for the quarter has shown a decline of 2.9%. Price index for Mumbai, Delhi, Bangalore, Hyderabad, Chandigarh, Gurgaon, Faridabad and Ghaziabad showed a negative trend. Prices in these markets down in the range of 9.1% to 1% over the last quarter. On the other hand, prices in Pune, Kolkata, Chennai, Ahmedabad and Navi Mumbai have gone up range of 6.6% to 2.6% over the last quarter whereas prices in Mumbai Thane and Noida have stabilized.
Let’s take an insight into the MPI for January- March 2015 at National, City and Sub-cities level
The National level index provides just the right amount of "push" a buyer needs for investing in real estate and fulfilling the dreams. Prices for property on a National level show a declining trend. The latest figures for Jan- Mar 2015 from the real estate market research and analysis point to a nation-wide decrease of only 2.9%. Therefore, the prices for the quarter have gone down by 2.9%.
Negative price trend in Mumbai, Delhi, Bangalore, Hyderabad, Chandigarh, Gurgaon, Faridabad and Ghaziabad
The Mumbai MPI has shown drop of 3.1% has been witnessed over the quarter. Interestingly the city in the previous quarter had shown a maximum increase in the index. A huge increase of 15.8% was seen in the MPI index in the previous quater. But, this quarter was marked by complete lack of interest among investors & home buyers in making long term high value purchase decisions. On an annual basis the city prices seem to be stabilized.
The Delhi MPI has shown the maximum drop. The Delhi MPI has shown a whopping dip of 9.1 % over the quarter. This means that this might be the best time for investing in the market. The first quarter of the year has brought good news for the home buyers of the capital as this only means that the coming months might experience a further reduction.
Bangalore MPI also shows a negative trend, the index showcases a decline of 5.5%. The city has seen a rise in property prices from October 2013 to February 2014, but it was not able to sustain that positive growth. Property prices there have been correcting since March 2014.
The Hyderabad has shown a dip of 5.3% over the quarter. This means that this might be the best time for investing in the market. The first 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.
The city of Chandigarh, has reported a decline in index with prices moving down at a 4.4%. It will be interesting to see in which direction this city moves in the coming months.
Faridabad saw a small depreciation in property prices. The sub-city has shown a negative growth of 3. Lack of proper infrastructure might have attributed to this trend. Also, not many new properties have been launched recently. But, on an annual basis the city has seen an appreciation of 17%
Gurgaon MPI witnessed a drop of 8%. Softening of price may be because availability of new inventory in other NCR area at significantly lower value. The new launches in Gurgaon area are also happening at prevailing prices. This trend is likely to continue unless we see a increase in transactions.
Ghaziabad index shows a small decrease of 4% in property prices.The property prices for the sub-city have seen a decline for quiet some and home buyers in the region can look to invest in Ghaziabad properties.
Positive price trend in Pune, Kolkata, Chennai, Ahmedabad and Navi Mumbai
The city of Pune has shown a property price rise of 6.6% which is the highest in the country. Pune 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 prices in Pune have remained increased 5.6% on an annual basis.
Chennai has shown a decent appreciation in property prices with an increase of 3.0%. It needs to be seen if this trend is carried forward. Availability of un-sold inventory has put a lid on the property prices and a sustainable increase is possible only if there is good absorption in the coming months.
For Jan– Mar 2015 period, Ahmedabad MPI shows an increase of 2.6%. The city has been moving sideways for over a year now. On an annualized basis Ahmedabad reported a 6.2% increase in prices. The short term trend for the city is encouraging.
Property prices have appreciated in Kolkata by 3.8%. Prices in Kolkata have remained subdued over the past 3-4 years on account of lack of infrastructural development. The monthly, quarterly and annual trends for the city are all positive with growth of 1.8%, 3.8% and 0.1% respectively. This makes Kolkata a preferable option for property investment in India
Navi Mumbai prices have appreciated by 5%. Navi Mumbai 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 Navi Mumbai have increased by whopping 14% on an annual basis.
Stability in Mumbai Thane and Noida
For Jan – March 2015 period, Mumbai Thane MPI shows a decrease of 1%. The decrease is not much as a shift under 2% is generally seen as stabilized. The sub-city of Mumbai 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 Mumbai Thane reported an increase of 2%.
Noida index shows stability in property prices as the index has not moved for the previous quarter. The property prices for the sub-city have been stabilized for quiet some and home buyers in the region can look to invest in Noida properties.