According to the National Housing Bank (NHB), house prices across 12 Indian cities had shown an uptrend in the April-June quarter with Bhopal posting the highest gains.
Experts had claimed that the demand for property in major cities across India had fallen following the Reserve Bank of India (RBI) raising interest rates 11 times since March 2010 to control inflation.
The sharp rise in borrowing costs had kept buyers on the sidelines. With the sharp rise in housing prices, the NHB Residex that tracked prices across 15 cities showed prices were firming up as against the January-March quarter.
Banks had raised their lending rates sharply in the past few months, with several banks witnessing a slowing in the demand for home loans as high interest rates hit sentiment.
Bhopal led the pack with a gain of 34.13 per cent followed by Faridabad which has saw in increase of 33.33 per cent. Housing prices in Kochi rose 24.42 per cent, Surat 16.41 per cent, Delhi 16.67 per cent, Chennai 13.76 per cent, Hyderabad 9.6 per cent, and Bengaluru 4.5 per cent. Mumbai, showed an increase of only 3.4 per cent followed by Ahmedabad 2.4 per cent, Lucknow 1.9 per cent and Pune 1.35 per cent.
According to experts, the increase in housing prices may be unsustainable against the backdrop of high interest rates.