Property prices in India rise by 4.5% in May 2010 says Makaan.com Property Index (MPI)
Makaan.com Property Index – National
Monthly Trend: At the National level, the property prices have gone up by 4.5% in the last month. The Index in May 2010 stands at 1144 as against 1095 in April 2010.
Quarter Analysis: Over the last 3 months, the MPI has seen a small rise - it has moved from 1108 in Feb 2010 to 1144 in May 2010, a 3.2% increase. The National index has been relatively stable in March and April, most of the gain has come in the month of May 2010 .
Year-on-year movement: As compared to last year i.e. May 2009, the MPI in May 2010 has moved up by 17.4%. Prices had dropped significantly in the second quarter of 2009 due to the economic slowdown. From thereon, the prices have been rising steadily over the last 3 quarters.
Makaan.com Property Index – City level
Monthly Trends: In the last one month most cities have seen increase in property prices. The key property markets Mumbai & Delhi registered an increase of 7.1% and 5.4%. The markets of Kolkata and Pune have seen price increments in the range of 3-4%. Price increases in Bangalore and Hyderabad have been in the 2-3% range. Ahmedabad prices have been relatively stable over the last one month. Chennai is the only city which has registered a drop of 4.5% in prices in the last one month
Quarter Analysis: Over the last quarter, i.e. between February to May 2010, there are many steep upward and downward swings in property prices across cities. Property prices in Delhi have moved up by 20.5%, in Ahmedabad by 19.7% and Kolkata by 13.9%. In Bangalore and Pune prices have moved up in the 4-7% range. In the same period, Chennai saw a steep price correction (11.7%) followed by Hyderabad (8.7%) and Mumbai (3.8%)).
Year-on-Year Movement: Over the last 1 year, i.e. between May 2009 to May 2010, most cities have seen significant increases in property prices. Kolkata, Ahmedabad & Delhi have seen very steep price increases - upwards of 30%. Pune, Mumbai have also seen 14-25% price increases. In comparison to these, Bangalore has seen modest price improvements - 9.7%. These cities have led the National Index to move up by 17.4% over the last 1 year. Hyderabad and Chennai have seen a reduction in property prices in the range of 9-12% in the same period
Going Forward: The stock markets have been volatile in the last few weeks due to the Eurozone's economic problems. On the other hand - the signals from the Indian Economy are quite positive - Industrial output, Exports and the GDP are rising, and jobs are more secure than before. At the same time interest rates are likely to go up, which may make buyers cautious in their purchase decisions. In the current situation one would expect the realty sector to maintain stability of prices.