Chennai, Mumbai and NCR property markets witness growth

India’s residential market has seen a rise in capital values in most micro markets across major cities. While there was an average price increase of 10% (y-o-y) in mid-end properties, high-end properties grew by 12% in the same period, according to Cushman & Wakefield India’s latest report.

Chennai saw highest increase in prices in the mid-end segment at 16% followed by National Capital Region (NCR) at 15% and Mumbai at 14%. As most of the mid-end projects are located in the suburbs and peripheral areas, where the ticket sizes are smaller, demand from end-users and investors alike has been more consistent thereby pushing the values north.

Additionally, since input costs have been rising, new projects are being launched at higher rates per sft, though albeit overall ticket sizes may be smaller. Overall for all the cities mentioned in the report, the economic base is broader and not solely dependent on the IT/ITeS sector, giving them stability against adverse economic conditions affecting any particular sector that could affect the demand-supply situation.

Amongst the individual locations, in the high-end segment, Baner in Pune witnessed highest year-on-year price appreciation of 57% followed by Central Bengaluru (44%) and Gurgaon (35%). In the mid-end segment, Gurgaon witnessed maximum appreciation of 31% followed by Aundh in Pune (30%) and South in Bengaluru (30%). Kompalli in Hyderabad saw the highest annual correction of minus 4%.

NCR on the other hand, witnessed the highest average growth in values of high end segment at 22% followed by Pune at 20%. Both the cities, the report stated, have seen the launch of a number of luxury projects with premium prices that are attracting interest from NRIs and HNIs from other cities as well.
The average capital appreciation in Bengaluru was moderate and in the range of 11-12% in 2012. The city witnessed healthy demand from both investors as well as end users, as it offers a number of affordable options in the micro markets of Hebbal, Whitefield, Marathahalli, Jayanagar and Bannerghatta Road among other areas.

Meanwhile, Kolkata and Hyderabad languished as non-movers with only marginal increases of 2-3% in select micro markets.

Source: Business Standard