Residential real estate prices in Delhi and Mumbai shot up by nearly 50-60 per cent in 2004. The steepest rise was in Delhi at around 60 per cent, and new colonies in suburban Mumbai saw a price escalation of about 50 per cent, according to real estate consultants Cushman and Wakefield.
In the Delhi region, there was increased purchase of suburban property like penthouses, the price of which ranges from Rs 1.5 crore (Rs 15 million) to Rs 4 crore (Rs 40 million) in Noida and Gurgaon.
Also, there was strong investment in land -- almost 70 per cent of total areas offered -- even before projects were launched.
"Earlier, people preferred to put money only after seeing the end product, but they are now willing to invest even before the launch of a project, purely based on developers' track record," Sanjay Verma, joint managing director of C&W said.
The capital values of areas like Prithiviraj road, Aurangzeb, Chanakyapuri, Golf Links and Shanti Niketan in Delhi are at present between Rs 100,000 and Rs 150,000 per sq yard, having moved up by about 50 per cent since last year.
It is, however, areas like Dwarka, Noida and Sunder Nagar, which saw sharp escalation in prices by nearly 80 per cent last year.
Both central and south Delhi witnessed an unprecedented rise in capital values. "There has been a sudden increase in the number of apartments in south Delhi. While the builder-apartments are an accepted norm in the current market, it cannot be denied that these multi-storied dwellings have increased the pressure on infrastructure leading to de-generation of south Delhi colonies," Verma said.
In Mumbai, areas like lower Parel and Parel in the central belt and Powai, Kandivali East, Malad and Goregaon in the northern suburbs have seen a sharp increase in real estate prices of more than 40 per cent in 2004.
While in Bandra West and surrounding locations, increased demand for residential apartments is being driven by the accelerating trend of suburbanisation among corporates, leading to demand for quality apartments in neighbouring residential areas.
South Mumbai has witnessed an appreciation for Grade A prime property, especially of a large size with prices crossing Rs 20,000 per sq ft.
The prices of smaller apartments in Grade B witnessed a marginal appreciation. According to C&W, a dearth of quality apartments in the location has put pressure on values.
While many corporates are liquidating their assets, a large number of high networth individuals is looking at acquiring apartments for self-use in the premium category in south and central Mumbai.
