How Southern Cities Dealt With Spiraling Realty Prices?

Land prices:

So the question that arises here is what’s keeping realty prices in check in south Indian cities? "Scarcity and expensive land parcels have hit the affordability factor in Mumbai and Delhi. However, land is not priced out in the south," said JC Sharma, managing director and vice-chairman of Sobha Developers, who had reduced realty prices by 10 percent after 2008 slowdown.

However, the northern cities have not escaped from price rise situation. "In the north, a passion for real estate along with the need to park black money has pushed up property prices dramatically in recent times," said Anckur Srivasttava, chairman of GenReal Property Advisers.

On this context, Anshul Jain, CEO of DTZ India, a real estate consultancy stated that "Around 70percent of the realty market in NCR-Delhi and Mumbai is investor-driven." Normally, an investor-driven market witnesses less transparency and distortions. Whereas, residential property prices in southern cities like Bangalore, Hyderabad and Chennai have observed 1-35 percent rise since from the fourth quarter of 2009, according to JLL’s recent report. In comparison, the residential values in Delhi-NCR and Mumbai have seen hike in prices by 20 percent to 40 percent in the same period.