Home Business Indian housing market to defy global downtrend, grows by 5%: Report

Indian housing market to defy global downtrend, grows by 5%: Report

The steady rise in house prices has worsened the affordability. (File)

Bengaluru:

India’s house prices will rise sharply in line with overall economic growth over the next few years, with a significant slowdown likely in the coming year, according to property experts in a Reuters poll.

The findings highlight that the housing market, one of the largest employers in the country of about 1.4 billion people, is likely to remain a steady contributor to the growth of Asia’s third largest economy.

As of 9 November-December, after a 7% increase in 2022, average house prices in India were expected to increase by 5.0% over the next three years, which is lower than the current consumer price inflation rate. 1 survey of 11 property market experts.

Forecasts for 2023 ranged widely from 1% to 13%.

But the outlook for India was relatively stable compared to major housing markets in developed economies, where prices are predicted to slide after a pandemic-induced boom as central banks aggressively raise rates.

Rohan Sharma, Senior Director, JLL Research, said, “The growth trajectory is certainly poised to reverse, but expectations of rising interest rates, which could act as a momentary disruption to demand, could drive up prices in 2023.” can reduce.”

The Reserve Bank of India has also raised its repo rate several times this year since May to 5.90%, by a total of 190 basis points, with few more hikes likely to be stalled.

The relatively modest interest rate risk partly explains why all but one in 10 analysts who answered an additional question said the likelihood of a significant downturn in the housing market in the coming year was low.

A regional breakdown of the latest Reuters poll data also projected prices in Bengaluru, Mumbai, Delhi and Chennai to rise by 5%-6% over the coming three years, in line with the national average.

The relentless rise in house prices – which have almost doubled in the past decade – has eroded affordability, lowering the hopes of many aspiring first-time home buyers.

House prices would only need to decline by an average of 6.25% from peak to trough to make them affordable, according to the average answer to an additional question, with a highest estimate of 17.5%.

Nine out of 11 respondents said either an economic downturn or rising rates would be the biggest challenge facing first-time home buyers.

Anuj Puri, chairman, Anarock Property Consultants, said, “While India … has been quite resilient amid the global disturbance, the possibility of a slowdown in India cannot be ruled out.”

“If jobs are affected, the divestiture towards real estate purchases could potentially go down.”

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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