Real Estate prices decline by 8% in Kochi – PrognoAdvisor

Real Estate prices decline by 8% in Kochi

Time of India has reported that the growth in housing prices in India has slowed down for the fifth consecutive quarter.TheRBI’s housing Price Index (HPI) growth eased to 5.2% year-on- year to 223.2 in January-March (Q4) of 2015-16, the lowest recorded increase since the index was constituted by the RBI in the first quarter of 2010-11.

The HPI for Kochi fell by 8% in the quarter compared to previous quarter and fell by 5.5% against the same quarter in last year. Only 4 cities (Bangalore, Chennai, Lucknow and Delhi) witnessed sequential or quarterly increase in HPI.Bangalore registered the fastest growth in housing prices on a quarterly basis in January-March. The HPI of Bangalore increased by 5.5% on a quarter-on- quarter (q-o- q) basis.

Chennai continues to remain a hot destination for real estate. Chennai’s HPI, which included both residential and commercial properties, jumped 12.1% y-o- y in January-March, the highest among the 10 cities. This was followed by Bangalore (7.2%), Mumbai 6.8% and Delhi 4.1%. The HPI declined 1.1% in Kolkata.

Our View: The real estate prices in Kochi and across Kerala are often driven by NRIs in the Middle East. After the decline in crude oil prices, most of the NRIs in Middle East fear about losing jobs and hence they are holding back their earnings in bank deposits. The fall in rubber prices has also affected the real estate market. We are seeing only more adversities in the near future. There is a hike in stamp duty which will make people differ transactions. The guidelines by the new Real Estate Regulator are not in favour of builders and hence there will be slow down in land purchases by builders.

Athira Joy

Digital Officer at Progno Advisor

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