A study by international property consultants Knight Frank finds real estate prices in India have risen by 21.3 per cent over the past one year, making it the country with the second highest rise in real estate prices globally. The Knight Frank report says over 30 per cent annual residential price increase in Mumbai.
The report projects India’s growth in residential realty rates second only to Hong Kong, which has seen a 26.5 per cent rise in the same period. As many as 21 of the 50 countries included in Knight Frank’s Global House Price Index have registered a decline in rates. The rest (except for four countries) have had a single digit per cent growth.
In an indicator of the extent to which many of the world’s economies are struggling, the report pegs the average annual growth in all the 50 countries at a marginal 1.7 per cent.
Gulam Zia, National Director for Research and Advisory Services, Knight Frank, said within India, Mumbai, with more than 30 per cent annual residential price increase, has witnessed the highest spurt.
Zia added Mumbai cannot remain insulated from the price meltdown that has started across the country.
“Prices are on the downside in Delhi and in the IT cities of Pune, Bangalore, Hyderabad. The jacking up of interest rates by the RBI, the tightening measures that are being enforced by the finance minister and the Planning Commission, are creating an ecosystem that will force developers to drop their rates further,” said Zia, adding that by January next year, two more sets of interest hikes are expected. However, he said the prices in Mumbai will go down only if there is an infusion of supply which is presently constrained owing to the pending policy decision on the areas calculations. “Once there is some clarity on that front, price will start decreasing in Mumbai too,” he said.
