If you are planning to buy a house this year, take all the time you need.
A Crisil research report on residential property prices of India’s 10 biggest cities says prices will remain more or less stable with a moderate dip in prices in Mumbai and a marginal (2 per cent) rise in the National Capital Region (NCR) in 2010.
According to the report, the average capital appreciation in the 10 cities is expected to be 2-3 per cent. Bangalore and Chennai are expected to see the highest rises of 7.3 per cent and 5 per cent respectively. On the other hand, Ahmedabad and Mumbai will see a correction in prices by 1.8 per cent and 0.4 per cent respectively.
Interestingly, Mumbai witnessed the maximum rise in prices by 11 per cent between March and November last year, the report said. While Central Mumbai witnessed a price rise of 21 per cent, the central suburb saw 15 per cent hike.
“Mumbai has already witnessed a steep recovery in prices after the correction in 2008 and the demand has slowed down since December 2009,” said Sudhir Nair, head, Crisil Research.
Developers, however, disagree. “We have not seen any drop in demand and I believe demand for residential real estate will go up by 30 per cent this year,” Niranjan Hiranandani, vice chairman & MD, Hiranandani Construction said.
“Mumbai is so starved of volume that unless land supply increases, prices cannot drop,” Dharmesh Jain, CMD, Nirmal Lifestyle, said. “Considering the rate of inflation, we expect that prices in Mumbai to go up by 5-12 per cent in 2010, depending on the location and quality of constriction of building.”
The expected price rise in Bangalore and Chennai is on account of recovery of the IT sector. “The confidence is back now in the (IT) sector leading to a demand in those areas,” said Nair.