Smaller Cities Trump Metros in Property Price Rise

Housing prices in metros seem to be levelling off while prices in some second-tier cities are witnessing an increase despite a weak economy. This was evident from the National Housing Bank's Residex index for tracking prices of residential properties in India.

The housing price index shows that in Delhi NCR region prices fell 1.5 per cent in January-March 2014 compared to last year. In Bangalore, prices also showed a decline of 1.8 per cent. In Mumbai and Kolkata housing prices were up 3 per cent and 4.5 per cent. Chennai however saw a double-digit gain of 12.5 per cent.

The housing pricing trends across other cities were mixed. In all 13 cities among the 26 places tracked by the Residex index showed a rising trend. National Housing Bank plans to extend the property pricing index to 63 cities in the future.

Surat led the pack in housing price increase, with prices rising nearly 18 per cent, followed by Chennai (12.5 per cent) and Nagpur (10.5 per cent). Property prices in Lucknow, Ahmedabad Hyderabad, and Raipur rose between 5-10 per cent during the one-year period. In Pune and Dehradun prices were up over 4 per cent.

(See: Cites Where Property Prices Have Gained Most in 3 Years)

In terms of fall, the highest decline among the 26 cities was in seen in Meerut where prices fell 13.61 per cent in a year, followed Ludhiana's 13.17 per cent slump and Vijayawada's 13 per cent drop.

Residential prices in Coimbatore, Indore, Chandigarh, and Jaipur were down between 5-10 per cent during this one-year period.

However, on a seven-year basis, many places saw residential property price increasing by over 100 per cent. In Chennai, prices surged over 250 per cent while it was over 100 per cent in Faridabad, Pune, Ahmedabad, Kolkata and Bhopal.