Property Prices Saw Dismal Growth In Last Five Years

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Property Prices Saw Dismal Growth In Last Five Years
Vishav - 04 March 2020

Property values in a majority of India’s prime residential markets have seen dismal growth in the past five years, indicating that a prolonged demand slowdown has kept value appreciation under check.

According to a recent report by PropTiger, the highest compound annual growth rate (CAGR) in property prices among key markets between March 2015 and March 2020 was a dismal seven per cent recorded by Hyderabad. Other major cities did much worse with Mumbai and Bengaluru witnessing a rise of 2.8 per cent and 2.1 per cent CAGR while Gurugaon and Noida saw a decline in property values during the five year period.

“An ongoing demand slowdown in India’s real estate market has kept price growth in check, as a result of which housing rates in most markets have shown only negligible growth. If Hyderabad stands as an exception here, it has more to do with the fact that the base price in what is referred to as India’s pharmaceutical capital was quite low during 2015. The state bifurcation also pushed prices upwards. On the other hand, moderate correction is seen in key NCR markets, primarily because of major delays in project completion by key developers,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com

In terms of absolute change in the period from March 2015 to March 2020, Hyderabad saw the average value of apartments increasing 40 per cent to reach Rs 5,318 per square foot (psf). In Mumbai, the average value rose 15 per cent to Rs 9,446 psf over the five year period. At the third spot on the list was India’s technology capital Bengaluru, where the average apartment value rose 11 per cent to Rs 5,194 psf in the past half a decade.

While price increases in Ahmedabad, Chennai, Kolkata and Pune were only marginal, the two NCR markets of Gurugram and Noida saw rates declining during the same period.

Housing prices in Gurugram fell by 7 per cent during the same period, while the decline in Noida was 4 per cent. These two NCR markets have been at the receiving end of negative publicity because of large-scale project delays and instances of some mega players entering into insolvency resolution.

The average property value in March 2020 over March 2015 increased by 4 per cent in both Kolkata and Chennai; the rise in Pune was only 2 per cent while Ahmedabad saw a rise of 3 per cent.

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