BENGALURU - The outlook for India’s moribund property market has brightened somewhat, with house prices this year expected to rise more than predicted three months ago, but those increases will still be the weakest in at least a decade, a Reuters poll found.
The latest poll of 18 property analysts taken May 10-June 3 showed home prices are expected to rise 2.3% nationally this year, up from 1.3% predicted in March but well below overall inflation. But those modest rates might not even be realized as over 80% of analysts who answered an additional question said their outlook for the housing market was skewed more to the downside.
The National Democratic Alliance government, led by Prime Minister Narendra Modi, introduced a host of incentives to shore up the struggling real-estate market last year.“The residential sector has endured significant pain over the last few years, but the NDA government’s return to power will reassure investors of stability and continued focus on growth,” said Aashish Agarwal, head of consulting services at Colliers International India.
“When funding becomes scarce, as a developer you become really pressurized to hive off your inventory as fast as possible,” said Rohan Sharma, head of research at Cushman & Wakefield India.A regional breakdown of the latest Reuters poll data showed Delhi and Mumbai, India’s two most populous cities, will not contribute much to property price growth.
According to our models in MarketPro, India is expected to have the third largest growth rate in annual spending power (7.33%) over the next decade.