Global property consultant Jones Lang LaSalle has cautioned that housing prices in Delhi-NCR and Mumbai have reached the peak level of 2008 and any further rise in the rates will adversely affect the demand. It said the prices in the rest of the country may firm up by about 10-15% next year to touch the 2008 level. “In Delhi and Mumbai, housing prices had fallen by about 25-30% after global meltdown in 2008. The prices have again shot up and reached their peak level this year,” JLL India Chairman Anuj Puri said.
Asked about housing prices outlook for 2011, Puri said: “I don’t think there is any scope left to increase housing prices. If it happens, demand will be severely affected in these two cities.” According to JLL India Chief Executive Officer (operations) Santosh Kumar, prices for mid to high-end flats in Gurgaon are currently hovering at Rs 8,000-10,000 per sq ft, while in Noida it is 3,500-5,000 per sq ft. “Similarly, apartments are offered for Rs 25,000-30,000 per square feet in Central Mumbai. Current prices in sub-urban Mumbai are little less and the range is Rs 9,000-16,000 for every square foot,” he added.
When asked if sales could be hurt at this price range, Puri said demand would continue to be good at the prevailing rates in Delhi-NCR and Mumbai. “Affordable housing will continue to do very well in the coming year… During the beginning of the year, prices of premium segment residential projects had picked up, but now it is stable,” he added. About office space sector, Puri had earlier said that demand is expected to grow by about 50% to 28 million square feet in 2010, mainly due to higher absorption of property spaces by financial, pharmaceutical and telecom sectors. The demand for office spaces is likely to stand at 28 million square feet this year compared to 19 million square feet in 2009, he said.
On rentals, Kumar said it remained stable during 2010 due to excess supply and is unlikely to rise in the coming year as well. However, certain locations in Delhi and Mumbai may witness some upward movement of rental values in 2011. The availability of office space stands at about 40 million square feet across the country during the ongoing year.
