Indian real estate presents a vivid picture. The metropolitan cities of India are giving tough competition to the famous cities of the world. Property prices in some Indian cities are higher than those in New York and Washington. Population growth is increasing the demand for residential real estate. Existing cities are expanding and arid areas are turning into townships and urban centers. Commercial and residential real estate is attracting genuine buyers and investors. Foreign investment in Indian real estate is also attested.

fluctuations in property prices

Property prices in the residential segment continue to fluctuate depending on supply and demand. In a recent property price survey, Indian cities show a mixed trend. According to the National Housing Bank, property prices have shown an upward trend in 9 cities in India. Also surprising are those 11 cities, including the Kolkata and Bangalore metropolitan areas, that experienced decline.

Data from the National Housing Bank presented the property rates for July-September 2012. In this quarter, 11 metropolitan cities and urban centers had falls in prices. In these cities a drop of up to 5% is reported. Property prices for residential units also increased in 9 cities by 10%.

9 cities witnessed price increases

The top winner this quarter is Kochi. The southern city in the state of Kerala saw a price rise of 10.1%. Located on the western coast, Kochi or Cochin is becoming a real estate hub in the state.

The second biggest winner is Jaipur, the pink city. Capital of the princely state of Rajasthan, the price of residential units increased by 9%. New projects launched by real estate developers attracted locals and migrant labor.

Other top winners include Delhi-NCR, Mumbai and Chennai. According to data from the National Housing Board, prices in the residential segment increased by 3.8 percent, 0.5 percent and 1 percent, respectively.

Many are not aware of the role of the National Housing Board. NHB RESIDEX records chart of property prices in various Indian cities. It comes out with property reports on a quarterly basis. 20 Indian cities, both metropolitan and developing, are part of the report. For the year 2012, the NHB reported the fluctuation of residential prices in 20 cities. It is expected that from 2013 another 6 cities will be part of the list.

The managing director of NHB reported on price trends. Property prices in Indian cities in the July-November quarter witnessed a general correction. The nine cities where prices have risen are expected to see a net drop in the coming months considering inflationary trends and the cost of inputs. He also commented on the situation of falling prices. The reason cities are seeing a drop in residential units is because of oversupply. Builders are lowering prices to boost sales and clear inventory.

Other cities in India, which have seen an increase in residential units, are Ahmedabad in Gujarat, Bhubaneswar in Orissa, Chennai in Tamil Nadu and Pune in Maharashtra. These cities saw price increases range from 3% to 7%.

11 cities show decline in property prices

The demand for housing in recent years has witnessed fluctuations. Rising home loan rates are affecting residential property purchases. Eleven cities in India have shown a decline in property prices. Faridabad in Haryana showed a marginal decrease of -0.4% while in Surat it was -4.8%.

Other cities where prices fell are Indore in MP with -3.54%, Kolkata in West Bengal with -2.4%, Vijayawada in Andhra Pradesh with -2.4%, Patna in Bihar with -1.8%, Ludhiana in Punjab with -1.7% percent, Bangalore in Karnataka by -1.7 percent, Hyderabad in Andhra Pradesh by -1.3 percent, Guwahati in Assam by -0.7 percent, Bhopal in MP – 0.5 percent.

The signs of convergence in prices in 20 Indian cities are the general trend, as seen in the NHB data. However, according to property watchers, prices are expected to fall in smaller cities and rise marginally.

Genuine home buyers will search for residential properties

Whatever the price situation, true home buyers will invest in residential properties. Owning a studio or land to live in is the dream of many. Although there will be an increase in prices, buyers in need will buy an apartment or land. This is more of an emotional decision than a smart real estate move. The price increase or decrease will not influence the first time residential real estate buyer.

Even real estate developers come up with deals in the cities to attract those clients. They are offering deals to customers to invest in properties in the cities. For example, Delhi/NCR developers lure customers with options like modular kitchens, LCD televisions, air conditioners, and even hardwood floors in master bedrooms.

Mass bookings of apartments in residential complexes are another way that home buyers can reduce the cost price. Real estate developers offer discounts to clients who reserve units in the same buildings or the same project in a group. Apartment prices are reduced from 500 to 700 per square foot. This reduces the total cost of the apartment, which makes customers happy. Even builders benefit from these kinds of massive bookings.

In India, the main residential centers are Delhi/NCR, Navi Mumbai and its planned townships, Bangalore and Mysore in Karnataka, Rajarhat and New Town in Kolkata, and Ahmedabad in Gujarat. Other cities that are part of the real estate movement in India are Ludhiana, Chandigarh, Lucknow, Jaipur, Pune, Kochi and Surat.

In conclusion, it can be said that the real estate sector in India is booming despite the slight drop in prices in some cities. Since land is limited in the cities, new townships are planned that include business options. NRIs investing in residential properties in the country are proof of the good returns of Indian real estate.