Tuesday, 6 June 2017

Mumbai luxury homes see 1.1% on-year price growth in Q1, albeit a declining trend Report

The country’s financial capital ranked 24th among 41 global cities tracked through the index. However, the price growth for prime residential properties has been on a declining trend

MUMBAI: Luxury residential properties in Mumbai recorded 1.1% price growth making it the only Indian city holding on to positive territory during the quarter ended March, showed Knight Frank Prime Global Cities Index.

The country’s financial capital ranked 24th among 41 global cities tracked through the index. However, the price growth for prime residential properties has been on a declining trend.

Delhi and Bengaluru, the other two Indian cities on the global list, witnessed negative growth of -2.6% and -0.2%, respectively during this period.

Chinese cities including Shanghai top the index with staggering double digit growth. Cities of Guangzhou, Beijing and Shanghai topped the index with an average price growth of 26.3%.

The small base size and limited residential inventory may have catapult Guangzhou to the top of the table with a whopping price growth of 36.2%, the report added. Shanghai, often cited as a model city for Mumbai also recorded a healthy 19.8% surge on the price card.

According to Samantak Das, chief economist and national director, Knight Frank India, luxury home markets at major Indian metros were probably still recovering from the short-term shocks of the demonetisation last year.

“From nearly a year-on-year price growth of 3% until two years back the prime residential market in Delhi has seen negative growth of almost similar measure in the quarter-ending March 2017. Likewise from a staggering year-on-year growth of 13.6% in 2015, Bengaluru recorded negative growth for the first time in five years,” said Das.

Das added that Mumbai, is holding to a positive price growth albeit, in a declining trend. Globally financial hubs such as Zurich (-7.0%), London (-6.4%) and Milan (-0.9%) have recorded negative growth. “Mumbai did better than many global financial centres but the price growth in the quarter-ending March 2017 has taken it back to Q1 2013 levels after touching a high of 3.2% price growth in 2015,” added Das.

Emerging tech hubs such as Seoul (17.6%), Stockholm (10.7%), Berlin (8.7%) and Melbourne (8.6%) outshined established global financial centres the index shows but price growth in Bengaluru, India’s IT capital was not in sync with the global trend.

Property prices in the US also saw a steady surge but luxury home rates in Toronto spiraled (22.2%) almost three times of Vancouver (7.9%).

Select Asian cities such as Hong Kong (5.3%) and Singapore (4%) fared better following years of ordinary performances.

Although prime rate in London fell by a sharp 6.4%, the performance in in the quarter ending March 2017 indicates stabilisation.