Housing prices in Jaipur decline most in country

JAIPUR: Extending a slowdown, housing prices in the Pink City corrected 3.8% in January-March quarter capping a year of decline that started in the first quarter of 2013, according to National Housing Bank. In the last one year, prices have fallen by 10%. 

While appreciation in the value of properties was witnessed in 12 cities out of 26 in the country that the bank tracks every quarter, the decline was the sharpest in Jaipur followed by Guwahati (-3.75%), Bengaluru (-3.6%), Meerut (-3.5%), Bhubaneshwar (-3.47%) and Ludhiana (-3.3%). 

In the last two and half years leading up to 2013, housing prices in Jaipur had shot up by 67% and property developers in the city said the current phase of correction could be the consolidation that the market needed before setting off on a new cycle. 

"The recent assembly and general elections had an impact hurting demand as investors looked for policy cues from the new governments both at the state and Central level. While the buyers' sentiment cannot be described as bearish, expectations have tempered a bit which is normal after a steamy appreciation. But demand will come back in the couple of months before Dewali which will drive the price appreciation," said Vinay Joshi, president, Rajasthan Affordable Housing Developers Association. 

Joshi said investors constitute 40% of the demand today with the rest coming from end-users. 

While developers agreed there is a slump in demand, some said the sharp fall in prices seems to be removed from reality. 

"If not rising, housing prices have been stable in recent months. But to say that they have declined by 3.8% doesn't seem to be the case on the ground," said N K Gupta, chairman of Manglam group. 

Gupta said the pipeline of developments still remains robust and there 500 projects including all segments and sizes are under various stages of planning and development in the city. 

The state government is likely to raise the District Level Committee (DLC) rates which in turn are likely to push the property prices dampening demand. But the industry feels that gap between DLC and market rates needs to be narrowed. 

"The reduction of the gap between DLC and market rates will lead to stable pricing regime and will curtail the room for black money transactions although there will be some upward pressure on the property prices," added Joshi. 

The Residex index of NHB showed that prices in Lucknow rose 4.9%, Raipur 4.4%, Mumbai 3.2%, Nagpur 2.9%, Dehradun 2.7%, Hyderabad 2.2%, Delhi 1.5% and Bhopal 1.3% compared to rates in October-December 2013 period.

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