According to Nomura, while the price rise has been more moderate in non-metro cities, the continued surge of house prices in metro cities suggests investment demand is the primary driver
Given elevated house prices, subdued job markets and lower household incomes, real demand should remain subdued. Consequently, in the absence of real demand, investment demand alone may not be able to sustain the excess return in metro cities, says Nomura Research.
According to the Reserve Bank of India (RBI)'s house price index, residential property prices in India have grown at a compounded annual growth rate (CAGR) of 21.4% between first quarter of 2009 and fourth quarter of 2012. Further, there has been a large divergence between growth in metro cities (CAGR: 24%) and non-metro cities (15%), even more so in the last year.
Nomura said, the growing divergence between metro and non-metro prices cannot be solely due to supply factors. "It also appears to reflect growing investment demand, which is typically concentrated in large metro cities due to higher liquidity. In contrast, the economic slowdown over the last few years has likely affected real demand in non-metro cities," it added.
There is plenty of room for further price reductions in the near future, for all types of,...
Srinivasan’s cup of woes seems to be spilling over with the sports ministry joining the growing chorus of demand for his resignation as BCCI president into the ongoing IPL spot-fixing scandal
The sports ministry on Wednesday joined the chorus for demanding resignation of Board of Control for Cricket in India (BCCI) chief N Srinivasan over the spot fixing scandal in the Indian Premier League (IPL).
In addition, several Board officials like Rajiv Shukla, who is also the chairman of IPL, Arun Jaitley, vice-president and BJP leader and Jyotoraditya Scindia, the union minister for power have urged Srinivasan to step aside pending an enquiry.
Gurunath Maiyappan, the son-in-law of Srinivasan and team principal and chief executive of Chennai Super Kings (CSK), the IPL franchisee has been arrested by the Mumbai Police for alleged involvement in betting. CSK is a unit of India Cements, a company owned by Srinivasan.
The sports ministry said it is observing the unfolding events “with considerable disquiet” and reiterated its commitment towards a strong anti-corruption law for sports.
“The Ministry of Youth Affairs and Sports is in favour of a law to curb malpractices in all sports. It will send its comments on the Bill drafted by the Law Ministry, and is looking forward to working with the Law Ministry and other stakeholders for the development of a comprehensive law against match and spot-fixing,” the statement read.
The Ministry, meanwhile, rejected reports that it was in favour of legalising betting to curb corruption in sports.
“The Ministry of Sports has also observed that a section of the media has reported that it is in favour of a law regularising betting in the sporting events in the country.
“The Ministry clarifies that betting is a State Subject and cannot be part of a Central law. The Ministry has made no recommendations to regularise betting to the Law Ministry or to any other organisation,” it said.
A three-member BCCI inquiry committee is also probing Meiyappan and the allegations against three Rajasthan Royals players and its franchise as well as the Chennai Super Kings.
Justice T Jayaram Chouta, former Judge of the Karnataka and Madras High Courts, Justice R Balasubramanian, former Judge of the Madras High Court, and BCCI Secretary Sanjay Jagdale are members of the Commission.