Mumbai’s average capital value appreciation in mid-segment residential properties is slowing to 16%, with Bengaluru gaining the most at 41% in the past 3 years, according to a report by real estate consultant Cushman & Wakefield.
The report analyzes the performance of the residential segment in the top seven cities to rank the average appreciations of capital value in the cities.
Bengaluru recorded the highest average appreciation of 41% in the mid-range segment, followed by Pune which recorded an average appreciation of 28% during the period 2011-2014. Chennai (27%), Delhi-NCR (22%) and Kolkata (17%) also experienced notable increases during the period considered.
In the high-end segment, Pune recorded the highest average appreciation at 39% in high-end properties, followed by Bengaluru (37%), Chennai (34%) and Kolkata (26%), while Hyderabad was down to (16%) below Delhi-NCR (24%) and Mumbai (24%) between 2011 and 2014.
While all cities saw their capital value increase between 14% and 41% in the mid-segment, high-end properties saw an appreciation of around 16% to 39% over the same period, according to the report.
Shveta Jain, Executive Director of Residential Services at Cushman & Wakefield, said: “Despite the disparity in the levels of average appreciation of capital values in the past, it is heartwarming that in the face of weaker economic sentiment, all markets recorded capital appreciation. Interestingly, markets that are largely end-user driven are also those with the highest average increases in capital values, while investor-driven markets such as Delhi-NCR and Mumbai have remained contained. in the appreciation received during the period. This is largely due to the fact that in recent years, due to factors such as slowing economic growth, the devaluation of the Indian rupee against the dollar, and general unrest due to factors such than inflation, the slowdown in real estate development, etc. led the more likely Delhi-NCR and Mumbai markets to experience a slower rate of appreciation. “
“Going forward, demand for mid-range housing will be robust due to recent budget tax reforms and the positive economic climate. However, due to the oversupply scenario in the mid-range segment, exponential growth in capital value is highly unlikely in the short term, ”Jain added.