Bengaluru: Indian house prices will hardly increase this year rather than economic recovery and helping politics, though the risk of a COVID-19 upturn preventing activity is low, as per Reuters poll.
The poll of 13 property analysts provided average house prices in India would increase 1.3 percent this year and that not until 2022 would rise the equal inflation rate with an increase of about 4.5 percent. Still, that was a U-turn from a 3 percent downfall analyzed for this year in September, when the housing property market was being choked by the pandemic, resulting in millions of unemployed. (The previous 2022 forecast was a 2.8 percent increase.)
The market gained some grip late last year, shielded by massive fiscal stimulus, accommodative monetary policy, and signs of a better-than-expected economic rebound. That followed a quarter-over-quarter fall of 1.1 percent in the house price index during the July-September period, its sharpest fall since January-March 2019, the data provided by the Reserve Bank of India.
Time to enter
“India’s economic resilience and a quick turnaround post the unlock has given possibly the biggest boost to buyers to enter the residential market with greater long-term confidence in India’s economic recovery,” said Rohan Sharma, head of research at Cushman Wakefield.
A 2021 cost increase was last expected in a March 2020 poll, just before the strict lockdown was forced. Ten of 13 suspects who answered a supplementary question said economic recovery would be the primary driver of housing market activity this year. Two pointed to an easy financial policy, while one quoted a desire for more living space.
At full tilt
The economy of India was predicted to rise 9.5 percent in the next revenue year assisted by an expansionary federal budget, a Reuters poll was taken this month showed.
Ten out of 12 market analysts who answered another question expected a significant rise in housing activity from policies in the union budget, due on February 1.
“Expected are a relief for second homeowners, promotion of tax concessions for new home buyers and concessions for builders/promoters, giving the sector industry status, and access to cheaper capital and loan reclassification extensions,” said Ajay Sharma, managing director at Colliers International.
All 12 answering another question said housing activity would increase this year and when asked about the risk of a resurgence of COVID-19 derailing the housing market this year, 11 of 13 said it was low.
“Unlike early predictions, the residential market rebounded much faster than other segments and the momentum continues to remain strong amidst growing demand for homeownership,” said Anuj Puri, chairman at Anarock Property Consultants.