Bangalore, the country's information technology hub, has beaten all other cities in terms of rise in property prices, according to data on Housing Price Inflation that has been included for the first time in the Economic Survey.
Bangalore saw realty prices rise 28.8 per cent every year between 2001 and 2005, according to data from National Housing Bank.
The Housing Price Index of Bangalore went up nearly 175 points in the period, the highest among the Indian cities. The index has been provided by the NHB's technical advisory group on a pilot basis. The bank, however, is setting up an institutional mechanism to release an economy-wide housing price index on a regular basis.
Delhi saw an average price increase of 19.1 per cent, followed by the Greater Mumbai City Corporation areas, where the prices went up by 18.6 per cent, and Kolkata Municipal Corporation, where the prices went up by 17.7 per cent.
"Rapid urbanisation and high economic growth in urban centres in the last few years has resulted in an upsurge in property values. The importance of facilitating supply of affordable housing and the necessity of designing a right mix of policy initiatives to encourage house acquisition highlight the necessity of tracking the movement of residential house prices," said the Economic Survey.
The HPI for Delhi City saw an increase of 101 points, followed by GMCC (98 points) and Kolkata (92 points).
"Moreover, the real estate assets are a significant component of the wealth of the private sector and financial freedom allowed for acquiring this wealth is one of the important financial obligations of this sector. For the financial intermediaries also, lending for residential houses has been a significant component of their credit portfolio," the survey adds.
However, places such as Kolkata Municipal Area saw an average price increase of 12.1 per cent, just behind other municipalities in Mumbai, which saw an increase of 13 per cent and Kolkata Metropolitan Area, which saw an increase of 14.5 per cent.
