Home-buyers cheer as property prices slump in metros

Home buyers in Delhi, Mumbai, Bengaluru and Chennai are elated over plummeting property prices, a trend which has also become a cause of concern for investors.

The slowdown of property price appreciation in these top cities has forced the investors to opt out of the real estate market in India, reports say.

Property investors are pained over difficult exit and incurred losses.

Presently, in Delhi-NCR property prices have seen minute appreciation around 2 per cent in the last quarter of 2015 against 7 per cent in 2014.

 Likewise, in Mumbai also the residential property prices saw an appreciation of 3.3 per cent only.

"A sign of any residential market's increasing maturity is evidenced by gentler price appreciation - a process which has been very much in evidence in the country's financial capital. Fourth quarter price performance in Delhi-NCR, Bengaluru and Chennai is also representation of what happened through the year," said Ramesh Nair, chief operating officer, business and international director at JLL India.

Meanwhile, JLL predicts that the Mumbai residential property prices in 2016 will touch 6 per cent.

The JLL study showed that unlike the pre-global financial crisis times, the market has seen a rather subdued growth in prices over the last couple of years.

"Current market does not offer any incentive to investors, even our usual set of investors are not showing any interest in picking up properties. If annual appreciation is less than 5 per cent and lease rental yield is around 1.5 per cent per annum, then why would they be keen to invest?," ET quoted Yashwant Dalal, president, Estate Agents Association of India, as saying.

However, Pune, Hyderabad and Kolkata have still seen relatively better appreciation in home prices at 5-10 per cent.