House prices seen rising further, Reuters Poll

REUTERS - House prices in India, which have more than doubled in the past five years, will keep rising this year despite a rapidly-slowing economy but prices in its financial capital, Mumbai, look ripe for a fall, a Reuters poll showed on Tuesday.

The poll of 19 property market analysts, consultants, developers and data firms, pointed to a median 7.5 percent rise in house prices this year in Asia's third largest economy.

Following is a summary of the results of the survey.

1. Please provide your forecast for average nationwide house price change in India in 2012 (%)

- A median of 18 responses expects a rise of 7.5 percent

- Forecasts ranged from a fall of 12.5 percent to a rise of 15 percent.

2. Approximately how much will house prices fall or rise in the following cities in 2012?

Delhi -

A median of 18 responses expects a rise of 7.5 percent

Forecasts ranged from a fall of 17.5 percent to a rise of 20.0 percent

NATIONAL CAPITAL REGION (NCR) -

A median of 19 responses expects a rise of 7.0 percent

Forecasts ranged from a fall of 17.5 percent to a rise of 12.0 percent

Mumbai -

A median of 18 responses expects prices to remain stable.

Forecasts ranged from a fall of 22.5 percent to a rise of 10.0 percent

Bangalore -

A median of 19 responses expects a rise of 5.0 percent

Forecasts ranged from 'no change' to a rise of 10.0 percent

Chennai -

A median of 19 responses expects a rise of 6.5 percent

Forecasts ranged from 'no change' to a rise of 17.5 percent

3. Which city will see the biggest correction in house prices before stabilising and when?

Mumbai is expected to see the biggest price correction of a fall of 12.5 percent by the Oct-Dec quarter this year according to a median of 7 respondents.

4. On a scale of 1 to 10, where 1 is extremely undervalued, 5 is fairly valued and 10 is extremely overvalued, what best describes the current average level of house prices in Indian metros relative to economic fundamentals?

The median of 18 responses was:

Mumbai - Rated 8.5. Responses ranged from 6 to 10

Delhi - Rated 7.5. Responses ranged from 5 to 9

NCR - Rated 7.0. Responses ranged from 5 to 8

Bangalore - Rated 5.5. Responses ranged from 5 to 8

Chennai - Rated 5.0. Responses ranged from 4 to 7 5. When will demand/sales to pick up in the following cities?

Forecasts spanned from Q2-12 to H2-13 for Delhi, NCR, Mumbai and Chennai (calendar year)

Respondents felt demand/sales are either already picking up or were stable in Bangalore.

6. Which Tier II city offers the best opportunity for returns?

- Ahmedabad was the top choice with 5 votes

- Pune - 3 votes

- Indore, Bhopal - 2 votes each

- Parts of New Gurgaon, Ludhiana, Chandigarh, Bhubaneshwar, Raipur, Ranchi - 1 vote each

* NCR - National Capital Region

Following is the list of poll participants: Ambit Capital, CARE Ratings, Cushman & Wakefield, Delhi Land and Finance (DLF) Limited, DTZ, Housing Development Finance Corporation (HDFC), Industrial Development Bank of India (IDBI), Jones Lang LaSalle India, Knight Frank, Liases Foras, Life Insurance Corporation Housing Finance Limited, Macquarie Group, PropEquity, Royal Institution of Chartered Surveyors-India, SARE Homes, State Bank of India, Sobha Developers, Tata Housing, Unitech.