Home buyers paid less for their purchases during January to March 2012 as real estate developers’ ability to hold on to prices started to wane. Prices of residential properties corrected in 10 of the 15 Indian cities surveyed for RESIDEX ? a housing price index ? released by National Housing Bank (NHB) for the quarter ended March 31, compared with the December quarter.

?In most cities, developers? ability to hold on to prices is on the decline,? RV Verma, the chairman of NHB told FE. ?They are softening their stance on pricing and are ready to negotiate with the buyers that are leading to a correction in prices,? he said. NHB is an apex-level institution for housing finance, owned by the Reserve Bank of India.

Prices of residential properties fell the most in Kochi and Bangalore at 12% and 8%, respectively, during the quarter as developers, burdened with oversupply, try to clear their stock. On a year-on-year basis, prices in Kochi fell sharply by 16%. However, in Bangalore, they surged 4.5%, indicating some demand revival over last year.

In Mumbai, pressure on residential realty demand continues and has now started to reflect on prices, though marginally. On a quarter-on-quarter basis, prices in Mumbai witnessed a correction of 1.6%. However, on a year-on-year basis, the prices in the financial capital still rose by 8.6%. Unlike Mumbai, prices in Delhi have risen all the way. While the quarter-on-quarter prices registered an increase of 0.6%, the Indian capital saw a whopping 33% increase in residential property prices on a year-on-year basis.

Jaipur has been the only city that witnessed a sharp increase in prices of 25% of its homes in the March quarter compared with the December quarter. According to Verma, growing incomes and growth in infrastructure activity in the city augurs well for real estate demand in Jaipur.

Interestingly, among the listed real estate companies that have reported results for the fourth quarter ? Godrej Properties, Oberoi Realty, Sobha Developers and Unitech ? all have seen a surge in their sales. While no real estate company concedes that the prices have corrected, analysts and market research reports say developers are privately negotiating prices with buyers, which has helped companies garner more sales.

Godrej sold 7.7 lakh square feet space in the fourth quarter against 5.2 lakh square feet in the previous quarter. Oberoi Realty sold 1.8 lakh square feet against 1.2 lakh square feet, Bangalore-based Sobha Developers, sold 8.6 lakh square feet space in the fourth quarter, while Delhi-based Unitech sold 18 lakh square feet against 17 lakh square feet.

?Pricing of residential units was by and large stable throughout the year. However, given the increase in input costs we increased the prices by R1,000 to R1,500 per square feet in our projects,? says Vikas Oberoi, the chairman and managing director, Oberoi Realty.

Pirojsha Godrej, the managing director and chief executive officer said, ?There was not much change in prices during the quarter”.

RESIDEX takes into account property prices based on 55,000 to 60,000 actual housing transactions across 20 cities. Bhubaneshwar, Guwahati, Ludhiana, Vijaywada and Indore have been new entrants in this quarter. The properties are spread across the city and takes into account all price bands in that particular city. The index is based on weightage, which is determined through dominance of a price in that city, along with some other factors, says Verma.