Urban property prices hit the roof

Increased economic growth resulting in a high rate of urbanisation in the country’s urban centres over the past few years has resulted in an upsurge in property values. Housing prices in five selected cities have increased by 12.1 per cent in Kolkata Municipality Area to 28.8 per cent in Bangalore City on an average over four years.

The period has shown significant variations in inter-year as well as inter-city data. While Delhi City experienced a meteoric rise in housing prices (from 6 per cent in 2002 to 34 per cent in 2005), Mumbai Metropolitan Region (16.5 per cent in 2002 to 19.5 per cent in 2005) and Greater Mumbai (19 per cent in 2002 to 24.5 per cent in 2006) saw housing price inflation go down in 2003 and 2004.

Housing price inflation, though decreasing in Bangalore City, still remains high at 22.8 per cent (the figure stood at 33 per cent in 2004). While these figures are only indicative as they are based on a pilot study, the National Housing Bank is in the process of setting up and institutional mechanism for this purpose.