Bangalore suburbs get costlier

Bangalore suburbs get costlier
Zoom In Demand As Prime Posh Localities Are Saturated
Mahendra Kumar Singh | TNN

New Delhi: It may sound unbelievable but property prices in the middle class localities grew at a much faster pace than posh areas between 2001 and 2007.
This has been revealed by the country’s first real estate price index, Residex, released by the National Housing Bank, to gauge house price movement over a six-year period both by localties and the size of houses in five cities of Delhi and Natonal Capital Region, Mumbai, Bangalore, Kolkata and Bhopal.
The NHB Residex shows that realty prices have been showing an upward trend in all five cities. Bangalore (313) is at the top with a three-time increase followed by Delhi (298) and Mumbai (268).
The index takes into account both what is shown in registration records as well as what is actually paid in the transactions to ensure that the market trends are reflected. The Residex, launched in July 2007, tracked property prices in Delhi, Mumbai, Kolkata, Bhopal and Bangalore by collecting data from the field and housing finance companies.
Experts feel that the trend of prices not going up in tony areas could be a reflection of the already high property prices in these localities at the time the price data were tracked. In short, what the economists call the ‘base effect’. Since the base property price in any middle-class area or suburb is much lower than a much-soughtafter area, the percentage of increase is far higher in the former than the latter where prices are already sky high.
Many attribute this phenomenon to the development of new growth centres in the suburbs or outskirts and the affordability of these areas.
“The Residex, the first of its kind in a developing country, will reflect the actual property prices as we are trying to cover around 15 cities,” said Raj Pal, principal advisor, NHB, adding that it will make people make sense of property prices which are very opaque.