Home prices rise in 12 cities: NHB Residex

Real estate is showing signs of revival. Residential property prices in 12 cities, including Mumbai, Hyderabad and Chennai, rose during July-September quarter, as compared to a year ago, according to the National Housing Bank (NHB) Residex.

However, in April-June, 22 cities, including Delhi, Mumbai, Pune, Bangalore and Chennai, saw a slump in prices after two years. Experts had said developers were resorting to price cuts to spur demand.

Now, with prices moving up, it seems real estate would soon rebound, a person tracking the sector said.

However, an executive with a leading developer said it was too early to comment on where the sector was moving and whether it would revive soon. “The prices will keep fluctuating till elections. Only after there is some stability in the economy and political environment, will the prices move in a direction.”

During July-September, the rise was most in Kolkata, 5.3 per cent jump, followed by Chennai, 4.95 per cent; Hyderabad, 4.77 per cent; Ahmedabad, 2.69 per cent; Lucknow, 2.14 per cent; Surat, 2.12 per cent; Patna, 2.04 per cent; Guwahati, 1.36 per cent; Raipur, 1.29 per cent; Faridabad, 0.99 per cent, Chandigarh, 0.53 per cent; and Mumbai, 0.46 per cent.

In the same period this year, the prices fell in 10 cities, of the total 26. The most was in Meerut (6.88 per cent fall) followed by Delhi (4.53 per cent) and Ludhiana (4.46 per cent). Vijayawada showed a decline of 4.03 per cent; Nagpur, 3.58 per cent; Bhopal, 3.09 per cent; Indore 2.18 per cent; Jaipur, 1.82 per cent; Bhubaneswar, 1.03 per cent; and Bangalore, 0.93 per cent. The prices were stagnant in Pune, Kochi, Coimbatore and Dehradun.

Residex has been tracking the movement in prices of residential properties on a quarterly basis since 2007.

From the quarter January-March this year, NHB Residex has been expanded to include six new cities -- Chandigarh, Coimbatore, Dehradun, Meerut, Nagpur and Raipur.

The data on the transactions are collected from diverse sources and are classified, validated and applied to the model designed to give the representative index for each city. The data based on actual transactions are put through a model that depicts the trend in the market.

The Residex is expected to bring greater uniformity and standardisation as well as greater transparency in the valuation of properties across the industry, according to NHB.

The real estate industry has been battling a phase of low sales and high inventory. Developers have been giving freebies with purchase of flats since last few quarters to spur the demand and boost sales.

Source: Business Standard

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Housing FDI may be liberalised

ACCORDING TO A RECENT GOVERNMENT REPORT, INDIA HAS AN ESTIMATED HOUSING SHORTAGE OF 18.78 MILLION

With an eye to address India’s housing shortage and make it affordable, the cabinet on Wednesday is likely to approve a proposal to liberalise the foreign direct investment (FDI) in the real estate sector.

Piloted by the Department of Industrial Policy and Promotion (DIPP), the relaxations will help bring in more foreign investments in the sector.

Though currently 100 % FDI is allowed in real estate which includes townships, housing, commercial premises, hotels, resorts and built up infrastructure but stringent norms ensured that the investments remained confined mainly to commercial real estate and upscale housing projects. Now, to bring in more foreign players, the government has proposed to reduce the minimum capitalisation to $5 million from $10 million. The entire amount will have to be brought in within six months of the project’s commencement.

Source: Hindustan Times

Housing Demand Picks Up In NCR : Sales Up 18 Percent

Housing sales have risen by 18 percent in the Delhi-NCR region during the first half of this year at 35,000 units, showing signs of improvement in the property market that has been facing slowdown in demand.

"During H1 2013, the NCR residential market witnessed a total absorption of 35,000 units showing an increase of 18 percent from H1 2012. This increase in sales can be ascribed to the high number of project launches in the affordable category. The NCR market is striving for a better equilibrium. Developers are focusing on project completion and deferring new launches and that the sluggish buyer sentiments have discouraged sales in some areas, but locations like Dwarka Expressway, Gurgaon, Noida Expressway and Greater Noida would continue to lure investors." property consultant Knight Frank India said.

On supply side, nearly 49,000 units were launched during the January-June period, showing increase of 11 percent compared to H1 2012.

Nearly 5.4 lakh residential units are under construction in the NCR market. The unsold inventory is pegged at about 1.32 lakh units, comprising unsold units in ready as well as under construction projects. "The NCR residential market indicated signs of stability in H1 2013. The developers are keeping new launches in check in order to bridge the supply and demand gap" Knight Frank India Chairman and Managing Director Shishir Baijal said.

"Over the past two years, the NCR market has experienced a fall in launches by nearly 40 percent compared to the peak levels of 2010. Both short term and long term moving average of launches confirm a plummeting trend. However, demand has recently stabilised and improved in the last few quarters, which sketches a healthy residential market scenario for NCR and if the supply-demand gap tapers further, the region is likely to face an upward pressure on property prices," Knight Frank's Chief Economist & Director Research Samantak Das said.

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