Tuesday, November 24, 2009

Property prices likely to go up in December

If you are looking to buy a house in Mumbai or in the National Capital Region be ready to take a big hit on your pocket. But south India may still hold a bargain or two, reports CNBC-TV18's Sunanda Jayaseelan.

Real estate developers have started hiking prices of their residential projects in Mumbai and the National Capital Region. So, if you are in the market to buy a home, you may want to look elsewhere like South India, for instance. Experts say prices in this region are still stabilising and in some cases, even correcting.

Let's take a look at price movements in the last quarter. Residential property prices in Mumbai rose 3-6% across developers. While NCR saw prices rise between 2% and 19%. Hyderabad, on the other hand, saw no hikes, while property prices in Chennai and Bangalore saw a dramatic correction. In some pockets in Bangalore, prices have fallen by as much as 5%.

Bangalore-based Sobha Developers has seen sales this quarter come in 57% higher that the previous quarter. It expects to have sold 2 million square feet of residential space by the end of this fiscal, and says volumes, rather than price hikes, will help it maintain margins. JC Sharma, MD, Sobha Developers, says, "As far as Sobha is concerned, we have good inventory. We don't see need to hike prices. I see us maintaining prices going forward."

But analysts say this trend may not last long. Anurag Mathur, MD - India, Cushman & Wakefield, says, "Prices are expected to go up by December. Not sharply, but it will still go up. I anticipate that happening at least in prime projects."

So, if you are in the market for a house, you will have to hurry. Industry experts say that developers are actually just adopting a wait-and-watch policy with regard to price increases. DLF for example, has already announced a marginal hike in prices in Bangalore. Experts point out that this could just give other developers the impetus needed to start price hikes again.

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