MUMBAI: A five-year price analysis of residential realty market in 11 cities shows that the ever-expanding Navi Mumbai and Thane have registered the highest percentage of increase in home prices across the country. They are followed by Mumbai.
According to the report by Jones Lang LaSalle (JLL) India, the two cities on Mumbai's outskirts have recorded a 80-85 % average price rise between April-June 2009 and January-March 2014 and Mumbai has shown a 75-80 % average increase. The lowest rise has been in Hyderabad (25%) followed by Noida & Greater Noida (25-30%) and Delhi NCR (30%).
"The main reason for the rise in Navi Mumbai and Thane home prices is that the rates were very affordable. As link to Mumbai improved and developers launched quality projects, the residential real estate demand increased, pushing up prices," said Anuj Puri, chairman and country head, JLL India.
The report says with the RBI not expected to decrease interest rates in the short to medium term, residential sales are likely to remain low. JLL data shows absorption of residential property is currently at a five-year low.
According to experts, the low sales volumes in the residential market means the launch of projects in the high-sale "affordable segment".
Puranik Builders MD Shailesh Puranik said, "The only way prices can be controlled is to ensure abundance of supply. For that, the state has to free new plots for development and reduce the high input cost of steel and cement." Ashutosh Limaye, JLL's research head, said he did not expect price rise in three to five years. "Sales has slowed down due to a high entry barrier of prices touching Rs 9,000 a sq ft," he said.