Prices on Residential Property Soar in India

Residential property values are on the rise in India. In Chennai they rose by 35 percent. In Greater Noida and Mumbai they skyrocketed 33 percent higher. The increases occurred in a one year period ending in June 2012.

As prices on existing properties went up, housing loan growth went down by 17 percent in June of 2011 to 15.1 percent in June of 2012. These figures come from the Reserve Bank of India.

Price increases are attributed to developers who defend themselves, saying labor and the cost of getting credit force them to get the increased monies needed from the homebuyers. Analysts put it another way saying it is due to the primary market having a high demand and developers being slow to begin new projects.

The manager of one real estate research company claims that developers have deliberately delayed supplies with the intent of keeping property prices high. In fact, in the second quarter there was a 24 percent decline in the beginning of new projects.

Mumbai is a prime example with a 73 percent decrease in the second quarter. Work was started on a mere 1,200 units in that prominent city. This is a huge decrease compared to the 4,460 that were launched in the first quarter. There were only nine projects undertaken in the second quarter.

It seems that there is a pattern, namely, the higher the price on a home, the lower the demand. Mid-range priced homes are still in demand. The prices that increased by 5-10 percent in the first and second quarters are predicted to rise by that much again during the third and fourth.

The developers all blame the cost of land rising. They also cite the price of cement, steel and wages of construction workers. The figures are up in places such as Bangalore, a city that experienced an increase of about four percent. Bangalore’s market is favorable while in cities such as Hyderabad the market is unfavorable, with the exception of the central areas.

A developer located in Bangalore saw a 73 percent increase in net profits. That was for the second quarter, ending in June of 2012. It is attributed to the lower cost to purchase land as compared to Mumbai, where land is sold at a premium price.

Residential property there rose 10 percent but only in specific areas. Other than that, the prices are not fluctuating either up or down.

Source: http://pptymag.com/prices-on-residential-property-soar-in-india/8547/

Resale property prices in Chennai reach a new high

Chennai

With Chennai’s residential property prices consistently moving north, location specific homebuyers are keen to settle for resale units available in city areas. Proximity to educational institutions, hospitals and retail facilities convince them to opt for resale properties.

Moreover, those looking at investing in larger units in city areas are also keen to dispose of their existing city units and opt for new units through bridge finance. All these compelling factors have virtually pushed the prices for resale apartments to a new high.

The price mismatch between old and new units is narrowing down to just 20-25 per cent now due to surge in demand for resale units, according to industry sources. Here again the demand varies depending on the specific location and property developers have a long waiting list from location specific customers for booking new units as and when new projects are launched at city locations.

For instance, in Kodambakkam while the new units are quoted anywhere between Rs 9,000 and Rs 10,000 per sqft, a resale unit deals took place place at Rs 6,500 per sqft, say realtors. Similar is the case in Nungambakkam at Rs 8,000 per sqft and Nolumbur at Rs 4,000 per sqft.

The demand for resale units particularly for middle class budget segment has been strong and growing, feels H Balasubramanian, Managing Director of Bhoomi Realty. The apartments coming up for resale are mostly located in gated community developments and in proximity to a range of facilities which makes life a little bit easier for Chennaites to avoid commuting long distances, he adds.

The demand for resale units is particularly strong in city areas like T Nagar, Nungambakkam, Chrompet, Nanganallur, Velachery, Nolumbur, Anna Nagar, Adyar and Besant Nagar apart from suburban locations like Sholinganallur on the IT corridor. There is a growing demand for other areas as well but the demand hinges on competitive pricing.

Even housing board flats with larger UDS are in big demand in areas like Besant Nagar and Kotturpuram as city land prices are soaring, says Murali, a realtor with Estate Points. With the redevelopment trend gaining momentum people are keen to invest in resale units now, he adds.

According to realtors, the trend is likely to continue until infrastructure development improves in suburban and peripheral areas with the emergence of more educational, health and retail amenities and connectivity levels.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/resale-property-prices-in-chennai-reach-a-new-high

City turns costlier, house prices up by 30% since last September

CHENNAI: Residential property rates have been going through the roof for months but new data shows that the spike for the quarter ending September was 30% more than the same period last year.

Chennai's central business district saw the highest price increases due to surging demand, according to NHB Residex, an RBI-supervised mechanism that tracks housing prices in 15 cities. However, prices in North Chennai - Tondiarpet, Perambur, Dr Radhakrishnan Nagar and Narayanappa Garden - saw a fall due to slow infrastructure development.

Despite the economic slowdown, high interest rates and inflation, prices of houses in the city's hotspots -- Anna Nagar, Kilpauk, Nungambakkam, T Nagar and Adyar -- have been rising. Prices in areas close to Nehru Nagar, Chepauk and Marina rose 62% compared to the quarter ending this June. "Chennai's residential market is expected to see unabated growth during the next few quarters. Active demandwillbeconcentratedin locations closer to the city centre," a recent Cushman & Wakefield reportsaid.House pricesin Chennaihavejumped 9% in the third quarter compared to the quarter ended June.

Prices in Virugambakkam, Anna Nagar, Kilpauk and Nungambakkam have quadrupled since 2007, when the National Housing Bank (NHB) begun the Residex for Chennai. The demand for residential units in Chennai is likely to see a compounded annual growth rate of 11% during 2011-2015.

Real estate consultants blame limited supply and huge demand for property for the surge in prices in the central business district. The city, awaiting the metro rail, monorail and extension of MRTS,willcontinuetosee demand for property near these infrastructure developments, and a surge in prices seems natural.

"In areas like Adyar, Anna Nagar, Boat Club and Nungambakkam demand is high because people want to buy property in places they have been living in for a long time. Another factor that boosts demand and reflects in pricing is the premium schools in those areas. Supply in these areas is low compared to the demand and so prices have shot up.

In Chennai, schools play a big role in residential demand and people are ready to pay premium pricesfor those areas," said S Ramaswamy, associate director, Recs Group, a real estate consultant.

Prices in Delhi have increased the most followed by Chennai and Mumbai, while Kolkata witnessed a decline over the previous quarter. Prices in tier-2 and tier-3 cities like Kochi, Lucknow, Ahmedabad, Surat and Bhopal saw a quarter-over-quarter decline.

Source : http://timesofindia.indiatimes.com/city/chennai/-City-turns-costlier-house-prices-up-by-30-since-last-September/articleshow/10851683.cms