The National Property Index during the fourth quarter has remained stagnant at the same level as that of the third quarter, with Ready to move properties witnessing a price fall of 0.4% and under-construction properties witnessing a price rise by 0.8%.
The National Property Index during the fourth quarter has remained stagnant at the same level as that of the third quarter, with Ready to move properties witnessing a price fall of 0.4% and under-construction properties witnessing a price rise by 0.8%. But the quarter witnessed steep price increase in the properties of Kolkata with properties in localities like Anwwar Shah Road witnessing a price growth of 23.2%.
Although considering the overall quarterly impact the prices in the eastern part of India remained stagnant, south was the only region that experienced a price hike, while north on the other hand watched the prices fall, said Sudhir Pai, CEO of Magicbricks, the repository of residential property listing.
The real estate sector saw both, the general prices dip and the ready to move prices suffer due to the pressure of demonetization. At an average, western India has done better than other regions with 9% price increment in their cities, Pai said adding “although the real estate market in India saw an initial dip after demonetization, the market at present has finally stabilized and catching back”.
However, Dr.Samantak Das, chief economist and national director research of Knight Frank, one of the leading global property research firms, said due to demonetization the current sentiment has seen a drastic fall to below the threshold mark of 50 to become the worst quarter in the last three years. The last quarter was significantly bad compared to the earlier six months and its effect continued during the 4th quarter. Although the impact of demonetization on the Indian real estate industry was short term but it had offset the growth witnessed during the last six months. The recovery in real terms would not happen before 2018.
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While according to Knight Frank Research residential sales dipped by 40% in eight major cities, Magicbricks pointed out that price decline was restricted to certain areas like Noida, Gurgaon and Ghaziabad. In places like Hyderabad, Greater Noida, Thane, Bangalore and Navi Mumbai, the prices went up by 0.5-2.5%. Prices remained stagnant in NCR, Mumbai and the remaining cities Kolkata witnessed a little growth in overall realty prices.
However, going by 73 localities across cities show that In the Oct-Dec quarter, around half the localities had price increment averaging 2.23%. The balance half had an average price drop of 2.16%. The City Index witnessed a 0.2% increment over the last quarter after gaining 0.57% in the previous quarter.
However, except the below Rs 7,000 per sqft budget segment, rest of the segments witnessed either a mild price increase or price decrease over the last quarter. Analysis across 73 localities shows that on an average, ready to move properties were 3.8% more expensive than under construction properties in the quarter. The average percentage price difference in the under construction versus ready to move properties remained more or less stagnant over the last quarter.
In Kolkata property prices during the last quarter witnessed a 0.56% growth and consumer demand also rose along with property prices. But in localities like Prince Anwar Shah Road price increased by 23.2%, followed by Ultadanga with 16.5%, Ballygunge Circular Road with 15.8%, Southern Avenue with 12.1%, and Gariahat with 10.9%. Property prices in Rajarhat- New Town area remained stagnant, while in other parts it dipped ranging between 0.5% and 2.5%.
However, the area wise fall and dip of prices has created a balance and has made the national property index stagnant during the quarter, felt Pai. Samantak felt that the mid to long term impact of demonetization would be positive washing away the unorganized players in the sector and enabling the organized players to get consolidated.