Real estate prices in all metros of India except one fell in Oct-Dec quarter: Survey

Residential real estate prices in all metro cities of India — Delhi, Mumbai, Kolkata, Chennai, Bangalore, Pune and Ahmedabad — fell in the October-December quarter last year with Hyderabad being the only city to buck the trend with a 0.2% rise in prices, according to a survey by global real estate consultant Knight Frank. The survey covered 150 cities around the world.

While the highest rise in prices, at 30.2%, was recorded in Ankara of Turkey, the sharpest fall was in Chennai that recorded 9% decline.

The rate of drop in prices in other Indian cities were as follows:  Bengaluru witnessed a decline of 0.8%, Ahmedabad 3.1%, Mumbai 3.2%, Delhi 3.9%, Kolkata 4.3% and Pune 5.3%. All the comparisons were year-on-year.

The report also stated that residential property prices fell in Mumbai in all the three quarters (Q1, Q2 and Q3) while in Delhi prices rose in Q1 but declined in Q2 and Q3.

Bangalore recorded growth in prices in Q1, Q2 and Q3 but fell in Q4. In Pune and Chennai prices declined in all the four quarters.

In Kolkata and Ahmedabad, prices rose in Q1 but fell in the other three quarters.

Property prices in Hyderabad rose in all the four quarters in 2020.

It was revealed in the survey that even in the COVID-hit year, prices across 150 cities all over the world rose at an average rate of 5.6% in 2020. In 2019, the rise was 3.2%.

The report also said that 81% of the cities saw prices rise in Q4 2020 and 20% of the cities registered double-digit growth rates.

Shishir Baijal, CMD of Knight Frank India, attributed the rise in prices in Hyderabad’s residential market to “the city being a preferred destination by professionals from IT/ITeS companies”.

However, experts believe that the Indian real estate sector is shrugging off the effects of the pandemic and is expected to report a recovery in the January-March quarter.

In a report titled ‘India Real Estate Outlook – A new growth cycle’, property brokerage firm JLL India signalled that there would be new offerings in the affordable and middle-segment with developers targeting pent up demand in this sector.

Labourers have returned to the construction sites and the construction sector recorded positive growth in the Q3 figures of the economy that were released on February 26.

A demand push is also being driven by falling home loan interest rates. While average home loan interest rates were around 8% in January 2020, this year the rates have plunged to below 7%.