India’s national capital New Delhi’s rank has fallen to 32nd among global cities, in terms of prime residential properties in 2021, as against its previous ranking of 31st, shows Knight Frank’s Prime Global Cities Index Q1 2021. Similarly, the country’s financial capital Mumbai also tumbled one place to 36th position on the index.
“New Delhi and Mumbai move one spot down to 32nd and 36th rank, respectively, in Q1 2021, compared to 31st and 35th rank in Q4 2020,” the London-headquartered brokerage giant said, in a statement. Considered as India’s Silicon Valley, Bangalore has also seen its position drop by four spots to 40th, in 2021.
In terms of average values of prime property, rates in New Delhi largely remained unchanged, with average prices standing at Rs 33,572 per sq ft in January-March 2021, after an annual correction of 0.2%. Mumbai saw values of prime residential properties declining by 1.5% annually, with average prices standing at Rs 63,758 per sq ft. Bangalore recorded a -2.7% annual price change for Q1 2020 to Q1 2021.
“The decline in prices of prime residential properties in India during the first quarter of 2021, can be attributed to multiple factors, such as uncertainty around the second wave of COVID-19 pandemic, high liquidity in capital markets, as well as the backlog of supply. Regardless, there is a propensity for consumption of prime residential properties in India, as the country continues to inoculate its workforce, to distance itself from the precariousness of future waves of the Coronavirus,” said Shishir Baijal, chairman and managing director, Knight Frank India.
The index is topped by Shenzhen, with Shanghai and Guangzhou following at second and third spots, respectively. Vancouver and Seoul are ranked fourth and fifth on the index, respectively. Some leading housing markets of the world – these include New York (-6.8%), Dubai (-4%), London (-4%), Paris (-4%) and Hong Kong (-3%) – have seen values of prime property moving downwards, because of higher tax rates and policy constraints, the report says.
According to the report, 26 cities witnessed a rise in prime residential prices in the January-March period of 2021, while 11 cities recorded double-digit price growth, when compared to last year.
The index defines prime residential property as the most desirable and most expensive property in a given location. The Prime Global Cities Index is a valuation-based index, tracking the movement in prime residential prices in local currency, across over 45 cities worldwide.
Meanwhile, data available with PropTiger.com show that the average values of property in India’s eight prime residential markets increased marginally during the April-June period of 2021. The average values of new properties in Ahmedabad and Hyderabad has, in fact, seen an individual 5% positive growth during the second quarter of the current calendar year (Q2 CY2021), in spite of the second wave of the Coronavirus pandemic hitting the country’s economy hard.
Price growth: City-wise break-up
|City||Average price as on June 30, 2021 (in Rs per sq ft)||Annual growth in %|
Source: Real Insight: Q2 2021
India slips 13 places to 56th position in global home price index
Although residential property prices increased by an average of 5.6% globally in 2020, prices in India declined by 3.6% Y-o-Y
Housing News Desk
March 22, 2021: In the latest global home price index, India has slipped 13 spots, to rank 56th globally, when it comes to home price appreciation. International property consultancy, Knight Frank, in its ‘Global House Price Index Q4 2020’, cited that India has seen a decline of 3.6% year-on-year (YoY), which led to the slip. Note that for the purposes of research, the consultancy tracks the prices of homes in 56 countries. India, in Q4 2020, therefore, remains the weakest contender among nations.
Top 10 countries in the world to record highest capital appreciation
|Rank||Country/territory||12-month % change (Q4 2019-Q4 2020)||6-month % change (Q2 2020-Q4 2020)||3-month % change (Q3 2020-Q4 2020)|
Source: Knight Frank Research
* Provisional | Data for Chinese Mainland refers to primary market | Data for Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Germany, Greece, Israel, Italy, Japan, Latvia, Malaysia, Poland, Romania, Slovenia and Taiwan is to Q3 2020; Data for Hungary, Luxembourg and Morocco is to Q2 2020.
Among countries, Turkey is numero uno, recording a 30% Y-o-Y appreciation, leading the index for the fourth consecutive quarter. Turkey is followed by New Zealand, which recorded an increase of 18.6% over the last one year. Slovakia with 16%, Russia with 14% and Luxembourg with 13.6% capital appreciation, are the others in the top five.
Residential real estate price trends in India
Morocco and India have shown the least price appreciation, at -3.3% and -3.6% Y-o-Y. However, many see this as an opportunity. In the case of India, prospective home buyers have always been hunting for affordable homes. With the Coronavirus pandemic wreaking havoc and with many jobs lost, buyers turned to the government for easing the financial difficulties that many were facing. Corrective measures included historic low home loan interest rates and reduction in stamp duty and other levies on residential purchases in key markets. Developers further added concessions to the governments’ steps, leading to a further reduction in effective prices of homes. These steps have stimulated demand for housing in the latter part of 2020 but have kept prices at bay.
“Low-interest rates and other demand stimulation measures by the government have fuelled real estate demand. This has led to sales and launches in Q4 2020 witnessed a significant jump, compared to the first three quarters of 2020. The pandemic has effectively changed end users’ outlook towards ownership of homes, leading many fence-sitters to make their purchase decisions. As the vaccine rollout takes place, we expect normalcy to return, after which the government will have to devise measures to extend the current sales momentum,” said Shishir Baijal, chairman and managing director, Knight Frank India.
The Global House Price Index Q4 2020 also highlighted that among 56 countries, 89% saw a price increase in 2020 and the average annual change across countries and territories was to the tune of 5.6% in 2020. New Zealand with 19% appreciation, Russia with 14%, the US with 10%, Canada and the UK with 9% appreciation, have recorded accelerated growth in rankings in the last three months, thanks to the growth in housing demand.
In the Asia-Pacific region, however, in spite of the commendable handling of the pandemic, the performance of the housing market remained glum, especially in Japan, Singapore, Hong Kong and Malaysia.