MUMBAI: Even as first-time buyers are exhausting their savings to buy a home, realty rates in India are going through the roof. Property prices increased by 12%, propelling India to third position among 53 countries where prices have appreciated in the past year.
The global house price index survey by property consultants Knight Frank shows that Brazil recorded the strongest annual growth (23.5%) in the past year, followed by Estonia with a growth rate of 13.9%. Globally, however, the picture isn't so rosy, the index shows.
The index is compiled on a quarterly basis using official government statistics or central bank data where available.
Property prices rose 0.9% in 2011-12 globally, shows survey
According to Samantak Das, national head (research) of Knight Frank, intrinsic factors drive property prices in each city. "Base prices in tier-2 cities like Bhopal and Guwahati are affordable compared to big cities like Mumbai, which are reeling under price pressure. The price difference in turn reflects on flat sales across various cities across the country,'' said Das.
According to house price index survey by Knight Frank, while real estate markets in some countries are doing well, globally picture doesn't look so rosy. "Global property prices have seen their weakest annual performance since depths of recession in 2009, recording 0.9% growth in the year ending March 2012. Doubts over Eurozone's future, along Asian governments' efforts to cool their markets and deter speculative investment, have taken their toll and house prices were static in the first three months of 2012,'' says the report.
Times View
The fact that property prices in India are rising at such a fast clip is good news for the real estate business and clearly also reflects India's status as one of the world's fastest growing economies. However, it also means that affordable housing remains a dream for many who flock to our cities as job seekers.
An important reason for this is that mega cities continue to bear a disproportionate share of the burden of providing economic opportunities to people. The government can ease the pressure on these cities and hence on property prices by rapidly developing transport infrastructure and satellite towns that can absorb some of the load. That will not only spread growth more evenly, it will make life in the cities more pleasant for everyone.
Source: http://timesofindia.indiatimes.com/business/india-business/India-No-3-in-world-in-realty-price-rise/articleshow/13860510.cms
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