BANGALORE: Property prices in Indian cities witnessed a modest rise in 2013, lagging Asian peers. Prime residential property values rose by about 6 per cent in Bangalore, helped by a pick-up in demand, according to a report by global real estate consultant Knight Frank. Growth was even lower in Mumbai and Delhi, at 3 per cent and 2 per cent, respectively. This is much lower than the 13.5 per cent average increase in real estate prices in the Asia-Pacific region during the year.
Globally, Jakarta witnessed the sharpest jump of nearly 38 per cent in property prices in 2013, followed by Auckland and Bali, which saw property values appreciate by 29 per cent and 22 per cent, respectively.
Monaco is the world’s most expensive city, with prime residential property selling at ?3.84-lakh per square feet, which is over eleven times the cost in Delhi. Among the Indian cities, Mumbai was the most expensive, with a per square feet cost of ?60,000.
Even with low price increase, Indian high net-worth investors allocate a higher proportion of their wealth to real estate than their global peers. About 44 per cent of their funds are parked in property, much higher than the Asian average of 28 per cent and world average of 24 per cent.
The property investment is skewed toward residential assets, with only 30 per cent allocation to commercial property. And when it comes to purchasing a home, rich Indians prefer to buy in metropolitan cities, while the preference to own homes in the rural and waterfront areas is low.
The number of Indian billionaires will double in the coming decade, surpassing Asian countries such as Singapore and Thailand. And by 2023, only USA, China and Russia will have more billionaires than India.
The increase in the number of wealthy in Mumbai and Delhi will lead to the concentration of prime property demand in these cities.
According to the report, Mumbai will find a place in Knight Frank’s list of top 10 global cities by 2024.