The Reserve Bank of India (RBI) said the price of houses in the small and medium size category has moderated more sharply as compared to the large size category.
In its monthly bulletin, it said the pace of growth in average house prices slowed in 2013-14 at 12.7 per cent, plausibly reflecting a correction in trends, on the back of subdued demand.
The index of house prices had been growing at an annual average rate of about 20 per cent (yoy) in 2011-12 and 2012-13. For the latest quarter, the yoy increase in the House Price Index at the all-India level was 11.4 per cent, compared to 10.5 per cent in the preceding one.
The Reserve Bank is compiling a quarterly house price index (base 2010-11=100) for 10 major cities -- Mumbai, Delhi, Chennai, Kolkata, Bangalore, Lucknow, Ahmedabad, Jaipur, Kanpur and Kochi. Based on these city indices, an average house price index representing all-India house price movement is also compiled. These indices are based on the official data of property price transactions collected from registration authorities of the respective state governments.
RBI said the growth in house prices had moderated in 2013-14 for Mumbai, Delhi, Kolkata, Jaipur and Kanpur. For instance, the price in Mumbai rose on an average annual basis by 30 and 18.5 per cent, respectively, for 2011-12 and 2012-13. This declined to 8.7 per cent in 2013-14.
However, in Bangalore and Ahmedabad, house prices grew at a relatively slower pace during 2012-13 but picked up momentum in 2013-14. Kolkata and Delhi picked up momentum in 2012-13 and then showed some moderation in 2013-14.
Prices in the small size category have gone up at an average annual of 23.7 per cent in the past four years. The average increase has been lower for the medium and large categories at 18.2 and 18.6 per cent, respectively. In 2013-14, the price increase in the small and medium size category moderated to 8.7 and 10.7 per cent, respectively, while that in the large size category remained almost at the average level.
Most realty experts say one should not expect the sector to turn round soon, especially the homes segment. While the new government has raised hopes and improved the sentiment of investors, companies and experts believe a revival is at least a year away. But, they said, commercial properties will be in demand.