House prices in India will increase only marginally despite the economic recovery
The Jan. 13-28 poll of 13 analysts showed that average house prices in India would increase by 1.3% this year and that it was not until 2022 that the increase would equal the rate of inflation. with an increase of 4.5%.
Still, it was a turnaround from a 3.0% drop predicted for this year in September, when the housing market was choked by the coronavirus pandemic, which left millions unemployed. The previous 2022 forecast was a 2.8% increase.
The market gained ground at the end of last year, dampened by massive fiscal stimulus, accommodative monetary policy and signs of a better-than-expected economic rebound.
This follows a 1.1% quarter-over-quarter drop in the house price index over the July-September period, its biggest drop since January-March 2019, according to data from the Reserve Bank of India.
“India’s economic resilience and a rapid recovery after unlocking has probably given the greatest impetus for buyers to enter the residential market with greater long-term confidence in India’s economic recovery,” said Rohan Sharma, Research Manager at Cushman Wakefield.
A price hike in 2021 was last expected in a March 2020 poll, just before the strict lockdown was imposed.
Ten of the 13 respondents who answered a supplementary question said an economic recovery would be the main driver of housing market activity this year. Two pointed to an accommodating monetary policy, while one cited a desire for more living space.
India’s economy is expected to grow 9.5% in the next fiscal year thanks to an expansionary federal budget, according to a Reuters poll conducted this month.
Ten of the 12 market experts who answered another question expected a significant boost in housing activity thanks to EU budget policies, expected on February 1.
“We expect relief for owners of second homes, the promotion of tax breaks for new home buyers and concessions for builders / developers, giving the sector the status of industry and access to capital extensions. and cheaper loan reclassification, âsaid Ajay Sharma, Managing Director of Colliers International.
All 12 respondents to another question said real estate activity will accelerate this year and, when asked about the risk of a COVID-19 resurgence derailing the housing market this year, 11 in 13 said it was weak.
A regional breakdown of the poll showed house prices this year will remain stable in Mumbai, Delhi and the latter’s national capital region, against contractions of 3.25%, 3.0% and 2.5 % respectively, expected in September.
Prices in Chennai would also remain stagnant as a 2.5% increase was expected in Bengaluru, against no change in the latest survey for the two IT hubs.
âContrary to initial forecasts, the residential market has rebounded much faster than other segments and momentum continues to remain strong amid increasing demand for home ownership,â said Anuj Puri, President of ANAROCK Property. Consultants.