Chennai tops in residential property cost

Contrary to the popular belief, it was not the country’s Capital city Delhi but Chennai in down South which witnessed maximum increase in prices of residential properties as high as 166 per cent — among major cities in five years since 2007.

According to the Economic Survey 2011-12 tabled in the Parliament on Thursday by Finance Minister Pranab Mukherjee, residential property prices soared by 54 per cent during the period in Delhi.

However, in comparison, it trailed much behind Bhopal where property rates zoomed by117 per cent followed by NCR Faridabad (116 per cent) Kolkatta (92 per cent), Mumbai (87 per cent) and Ahemdabad (67 per cent).

The survey has attributed the spiraling property prices to the shooting cost of the infrastructural materials such as concrete and iron as well as better connectivity particularly with the upcoming metro network

“The possible reasons for increase in prices could be overall increase in inflation rate particularly relating to building materials, improvement in infrastructural facilities like metro connectivity resulting in increased demand for housing, favourable political and economic environment and increased business and employment opportunities,” says the survey.

The other cities where real estate market was buoyant were Pune and Lucknow which saw a jump of price hike by 63 per cent and 60 per cent respectively in the residential property between the years 2007-2011. Prices in Surat and Patna also soared by 47 per cent and 43 per cent respectively.

However, astonishing as it was, four cities, according to the survey, witnessed drastic decline in prices. Maximum decrease was observed in Jaipur by 36 per cent in the said five years followed by Hyderabad (14 per cent) Bengaluru (6 per cent) and Kotchi (2 per cent).

However, with the real estate market booming, the survey has tried to drew attention of the policy makers to the widening gap between demand and supply of the housing units resulting from inadequate housing.

The other main cause of concern was that while the finance sector in the country has experienced buoyant growth over the past several years, homelessness amongst the lower segments of population has continued to increase.

“Despite significant growth of the housing loan portfolio in the sector, access to formal credit was mostly available to people in the formal sector…Sizeable segments of the informal segment market still remain untouched,” said the survey giving a macro and micro-view of the country’s economy.

Source: http://www.indianrealtynews.com/real-estate-india/chennai/chennai-tops-in-residential-property-cost.html