Residential property index shows the sluggish property market in the city is showing signs of revival
Property developers hope to cash in on the new buoyancy in the market underlined by National Housing Bank’s residential property index (Residex), showing a rise in Kochi comparable with the near-peak during last quarter of 2011.
Antony Kunnel, president of Confederation of Real Estate Developers’ Association of India (Credai), Kochi chapter, is optimistic that the market, which has remained sluggish for a while, is showing signs of revival. The situation was now right for a new lease of life for the real estate business, he told The Hindu on Thursday.
He said that the two-day Credai Property Show 2012, which begins here on Friday, will be a test of the market situation but expressed optimism over the growth in enquiries.
National Housing Bank’s property index for residential units has shown a substantial rise for the July-September period this year. The index stands at 80 points, with the base year 2007.
It was during the last quarter of 2011 that the index had gone up to 82. Since then the index for Kochi has shown a continuous fall. The index stood at 72 during the January-March 2012 and at 73 during the following quarter.
Kochi had recorded its all-time high index during the April-June period of 2011 when the index stood at 107. Since then it has been a downward move though during the January-March 2011 period, the index stood at 86.
Mr. Kunnel said this was the right time for buyers because the prices could go up considering the ground realities like the input cost. The prices have not moved up, or it has just moved up marginally for a long period now. The situation is likely to change, he said.
Mr. Kunnel said input cost had gone up substantially with every rise in steel and cement prices. For example, every rupee increase on a kilogramme of steel raised the price of a property by Rs. six a square foot.
Similar was the case with cement and labour costs, he added, pointing out that labour cost had gone up about Rs. 100 each a year over the last two years. Price of cement had gone up from the Rs. 230-250 level to over Rs. 340 now.