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This article is more than 5 month old.

This week in real estate: Sales dip, prices crawl

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Indian homes aren’t getting their owners anywhere in terms of property price appreciation. What happened? Take a look at these numbers.

This week in real estate: Sales dip, prices crawl
If you’re considering investing in a home anytime soon, the RBI’s House Price Index (HPI) data may make you re-think that move. Released earlier this week, HPI data indicates that the average returns from Indian real estate for FY21 stood at a paltry 2.2 percent, due to fewer transactions in the wake of COVID-19.
Sample this: the All-India HPI increased year-on-year by a mere 2.7 percent during the March quarter of FY21. The corresponding increase last year was 3.9 percent. I know what you’re thinking: what do these numbers even mean? It’s simple: Indian homes aren’t getting their owners anywhere in terms of property price appreciation.
Can metros weather the storm?
But there’s some glimmer of hope. For instance, Bengaluru witnessed a good number of transactions, reporting an HPI increase of 15.7 percent. This is in sharp contrast to cities like Jaipur, for which HPI contracted by 3.6 percent. So, for all you know, the metros could still hold their own in terms of price appreciation.
Here’s what is really, really worrying though: the Reserve Bank’s HPI data comes even as Knight Frank reported a few months ago, that India recorded a 1.6 percent year-on-year decline in home prices. The property consultancy had the Indian housing market falling 12 places, from Rank 43 to 55, in the Global Home Price Index.
Property sales dip in April-June
You can’t help but feel that at this point in time, Indian real estate is a buyer’s market, with investors unable to get bang for their buck. Days ago, property consultant Anarock reported that housing sales for this quarter (April-June) stood at 24,750 units. This was a quarter-on-quarter drop of 58 percent, owing to the COVID second wave.
However, some good news — if there’s any of that in Indian real estate these days — is that 24,750 units were a 93 percent jump over last year’s April-June numbers although that’s hardly a comparison since 2020 has largely been considered a wash-out year, barring some post-lockdown pent-up demand.
These worrying numbers notwithstanding, real estate stocks had a decent week. DLF, Brigade Enterprises and Prestige saw their share price increase between 1.34 percent and 5.80 percent in the last five days. Newly listed Macrotech Developers (erstwhile Lodha Group) also ended the week in the green, albeit at a marginal 0.63 percent.
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