Property Rates Begin to Rise in Bangalore

In recent months, real-estate prices have shown a boost in 16 out of 26 cities covered by the country’s most authoritative residential housing price index, suggesting that selling prices may be finally bottoming out. Prices in Delhi and Bangalore rose during the quarter ended December 2013. In Mumbai, prices stopped falling for the first time since March 2013.

The Residex, an index released every quarter by the National Housing Bank (NHB) with tech support team from RBI, has shown a sharp swing away from the trend earlier this year. In the first quarter of FY 14, residential real-estate prices fell in 22 cities out of 26 in the list , a performance which better to 10 cities in the following quarter , finally to eight in Q3 .

Prices were flat in 2 locations in the third quarter. In Q2, prices were flat in four locations; rose in 13.
In Bangalore and Pune, prices have risen for the first time since the last quarter of FY 14, the latest Resided data shows. The greatest rise was in Nagpur (8 per cent over the previous quarter) , followed by Guwahati ( 7 .4 per cent ) and Pune ( 7 .3 per cent ) .

House prices in Delhi rose 3 .2 per cent over Q2, while those in Chennai and Bangalore rose 3 .8 per cent and 3 .7 per cent respectively. Patna has seen a significant boost of 6 per cent in prices.
Major cities where prices continue to fall are Lucknow ( by 3 .1 per cent from Q2 ) , Jaipur ( 2 .8 per cent ) , Chandigarh ( 2 .1 per cent ) and Kolkata ( 1 .5 per cent ).

The trend is significant because house prices are rising even though interest rates have not fallen. In the third quarter monetary policy released in January, Governor Raghuram Rajan increased benchmark interest rates by 26 basis points to 8 per cent.

R V Verma, the president of NHB, which also acts as a quasi-regulator for the field, said there were clear signs of a change in the trend of persistent decrease. “There is a strong demand from end-users. They are not ready to stay on the sidelines now,” he said.

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