NHB Residex shows increase in home prices across 18 cities

NEW DELHI: Despite home sales going down in many markets across the country, the National Housing Bank's residential housing index, Residex has shown an increase in home prices in the October-December 2012 quarter across 18 of the 20 cities it tracks.

NHB, says Verma, will start covering six more cities from the January-March 2013 quarter. "Based on these 26 cities, we will asses if we could construct a national property price index," says RV Verma, chairman, NHB.

The cities which have shown the maximum quarter-on-quarter increase are Mumbai (9.6%) followed by Delhi (9.6%), Kolkata (9.4%), Patna (9.4%), Kochi (8.8%), Surat (8.7%), Bengaluru (8.2%), Lucknow (8.0%), Hyderabad (7.1%), Ludhiana (6.5%), Ahmedabad (6.1%), Guwahati (5.1%), Bhopal (4.9%), Bhubneshwar (2.4%), Jaipur (2.4%), Vijayawada (2.2%), Pune (2.0%) and Chennai (0.6%).

There was a fall in home prices in only two cities-Indore (-1%) and Faridabad (-5.1%) during the quarter.

"The rise in input costs for developers and sustained inflation is reflecting on the increase in prices in 18 cities," says Verma.

Prices have also been positively impacted by improved infrastructure development in many cities, which is also pushing investor demand. The last few months have seen new supply not coming, which has kept the prices on the higher side.

Home sales have been under pressure because over the last few quarters as the overall sentiment in the economy has been slow and interest rates have been high, forcing home buyers to postpone their buying decisions.