Property prices in Kolkata appreciates by 25.1%
Kolkata Real Estate Market, remains a seller centric market, even after going through a rough patch for over a year. Makaan.com Property Index (MPI) released in June 2012, signifies a property price increase of 25.1% in the last one year. Though the wait and watch approach adopted by home buyers for a longer duration has reduced the volume of property transactions considerably, there has been not much of an effect on the soaring property prices. The Kolkata property index for June month stood at 1349 compared with 1078 in the month of June 2011. The appreciation in the Kolkata market seemed to be confined till the end of 2011. The Kolkata property index indicated a dip of 5.7% in property prices over the last quarter. The MPI figure was at 1349 in June 2012 compared to 1431 in March this year.
As per the June 2012 MPI, the national index dropped from 1486 in June 2011 to 1446 in June 2012, signifing a softening of 3% in national residential property prices. The reduction is louder, if one looks at the city wise analysis. Cities with maximum price reduction over last 12 months are Hyderabad (-26%), Chandigarh (-20%) and Ahmedabad (-11%). Problems in Hyderabad are political and sentiment driven which creates volatility in the property prices. Chandigarh and Ahmedabad experienced new project launches at a significantly higher value compared to the prevailing market prices (during the June-October 2011 period) last year which took the property prices higher. These new launches caused a temporary mismatch in the demand-supply equation in these two markets. The situation has become better in the more recent past. Other real estate markets are also showing some sign of fatigue. The softening of prices is evident in markets of Chennai (-7%), Mumbai (-7%) and Bangalore (-5%). The coming 4-5 months (in the run up to the festive season) will be extremely crucial for the real estate industry. Giving support to the Makaan index were the property price movements in cities of Kolkata, Pune and Delhi NCR that rose by 25%, 16% and 4% respectively over last one year.