Home Prices Set To Rise And Pick Up Pace This Year

BENGALURU: 

Indian house prices will rise this year and next at a faster pace than predicted just three months ago, supported by the economic recovery from the pandemic, according to a Reuters poll of property analysts.

Once a bright spot in India's economy, the housing sector was struggling even before COVID-19. But unlike most other major world property markets it has remained in the doldrums throughout the pandemic.

Average house prices rose only 2.5 per cent last year, according to Reuters calculations based on the Reserve Bank of India's House Price Index. That compares with double-digit gains in nearly every other property market.

But as Asia's third-largest economy gets back on track, the housing market was expected to pick up pace.

The Feb. 9-28 poll of 13 property analysts predicted national house prices to go up a median 5.0% this year, an upgrade from the 3.75 per cent expected in a December survey.

Average Indian house prices were expected to rise 7.0 per cent next year and in 2024, partly driven by increasing input costs for new homes as oil prices were expected to rise further as the Russia-Ukraine crisis worsens.

"The third wave of the pandemic has apparently not dented business confidence and investors appear mostly unperturbed this time. We expect a rise in prices over next two years provided no major socio-economic disruptions occur," said Arvind Nandan, managing director of research at Savills India.

Nearly three-quarters of respondents, or 8 of 11, to an additional question said the Indian housing market would become a buyer's market in 2022.