Property-seekers might think Delhi-NCR has the maximum appreciation potential within a year’s time. However, it’s the Mumbai real estate market which beat all Indian cities in terms of price escalation over a period of 12 months. Mumbai has bucked the economic slowdown by witnessing a whopping 24.7 per cent jump in prices between January and December 2009. During the same period, realty rates in Delhi-NCR rose by 8.8 per cent.

But other emerging residential destinations such as Hyderabad and Bangalore have witnessed a fall of 7.7 and 2.2 per cent, respectively, the index added. However, Pune market gained significantly by 9.9 per cent. The survey revealed that all these five cities — Delhi- NCR, Mumbai, Pune, Hyderabad and Bangalore — witnessed a drop in property prices in the first six months — January to June — due to slump in the market. But the subsequent gain came following the launch of various affordable units. These units have now achieved premium value across India.

The study said property prices increased by another 12.8 per cent nation-wide during the surveyed period of 12 months. Commenting on the price rise, Anupam Mittal, chairman and managing director (CMD), Makaan.com, said, “Prices in Mumbai have gone up dramatically but it has not been able to touch the peak of mid- 2008. However, the trend should continue in the near future.” The primary reason for the price rise in Mumbai’s market could be attributed to expansion of the peripheral areas.

Abhishek Kiran Gupta, head (research), Jones Lang LaSalle Meghraj, said, “Among the huge population base, there is always a component of people who seek to own property. With more and more suburbs getting developed, there are always opportunities to enter the residential market at a relatively affordable level.” Gupta added, “They will benefit from the inevitable price rise as these areas develop in terms of connectivity and infrastructure. Therefore, there is also a perennial demand for owned residential properties among those who can afford the capital outlay necessary to avail of the investment potential of Mumbai’s high appreciation rates. Lowered home loan interest rates serve to keep this demand at a healthy level.”

New project launches from developers such as Hiranandani, Mantri Developer, Mahindra Lifespaces and Orbit have also added to this rate rise. As per the latest data made available by Gurgaonbased research firm PropEquity, Mumbai will offer 172 million sq ft of residential space by 2012. Its eastern suburbs — Thane and Navi Mumbai — have become favourable investment destinations. Delhi-NCR, too, has upcoming suburbs such as Faridabad, Greater Noida, Noida, Ghaziabad and Gurgaon. Small towns in the distant suburbs like Hapur, Meerut, Sonipat, Panipat, Palwal and Kundli have, however, taken a backseat.

In comparison, Delhi-NCR falling behind Mumbai could be attributed to the oversupply of residential units and commercial spaces, according to Rakesh Kaul, COO, Ansal API. He said, “In Delhi-NCR, one would find that there are three different states with different policies and investor sentiments. Moreover, there is an oversupply in the residential as well as the commercial segments. This had led to a drastic drop in the prices till the middle of the year.

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