Residential property prices in cities down by upto 5%: C&M

With the ongoing slowdown in real estate industry and correction in secondary markets, some of the country's major cities have witnessed up to 5 per cent fall in capital values in residential properties, a Cushman & Wakefield (C&W) report said.

According to the global realty consultant C&W, the high -end residential market of Pune has seen a decrease of 5 per cent in capital values during July-September period, while it fell by 1 per cent in the mid-range category.

Other prominent markets, like Mumbai and Bangalore, witnessed a fall of 4 and 3 per cent respectively in the mid-range housing sector, it added.

However, few locations in Chennai witnessed appreciation in capital values up to 8 per cent.

"Most markets are predicted to continue to have stable capital values with a softening bias in the last quarter of 2008, with the exception of Chennai which may see some further strengthening in key micro markets. A lacklustre festive season, along with sharp drop in the stock markets have further aggravated the situation for the developers, who are also battling conditions such as high rates of servicing debt and liquidity issues," C&W India Director (Residential Services) Aditi Vijayakar said.

Such conditions have led many developers to re-align their strategies and several developers may be now looking at targeting the middle-income groups, where the demand is high and mostly driven by end-users, she said.

"Correction in value in the secondary sales market has impacted the overall values of residential properties in certain micro-markets and is expected to further affect the capital values in the next quarter," the report stated.

Source: EconomicTimes