Letters: Real property prices

This refers to the report "Mumbai property prices leave Delhi behind" (August 14). The report shows appreciation rates that are (a) cumulative, and (b) not adjusted for inflation.

The report said that Mumbai showed record appreciation of 25.27 per cent between June 2012 and May 2014. This implies that appreciation per annum is 11.93 per cent. However, in the same period, there has been inflation of 9.63 per cent (this is based on the cost inflation index used for the purpose of computing inflation-adjusted long-term capital gains for taxation purposes). It means that there has been real appreciation of only 2.30 per cent per annum.

The table shows calculations for other cities as well. See the last column in particular. The real appreciation rates are small. For three of the five cities, the appreciation rate is negative. There has been maximum real fall in the Delhi-NCR region, -7.44 per cent per annum.

Gurbachan Singh New Delhi

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