India home prices to outstrip inflation, driven by high end of market
economy, India's housing market barely suffered a scratch from the Reserve Bank of India's 2.5 percentage points of interest rate rises from May 2022 through February this year. Average home prices were forecast to rise 6.8% this year and next, poll medians from a Nov. 16-30 survey of 12 property market experts showed, more than double the just over 3% increase in 2022 according to Reuters calculations based on the RBI's House Price Index.
While those expectations are mostly the same as three months ago, they are higher than the 5.5% and 5.0% predicted at the start of this year. If realised, home price inflation will outstrip the increase in consumer prices for the first time in five years. Retail inflation was forecast to average 5.4% and 4.8% this fiscal year and next in a separate Reuters survey.
"Rising input costs and the sector's transition away from the affordable segment towards the high-end and luxury segments in many markets are likely to drive prices," said Anuj Puri, chairman at ANAROCK Property Consultants, who had the highest forecasts for price appreciation next year. "The continuation of a low-interest rate regime is expected to be favourable and to stoke housing demand in the country." The RBI's campaign to raise interest rates was one of the more modest among large economies, with the repo rate now sitting at 6.50%, low by historical standards. The survey predicted home prices in large urban centres Mumbai, Delhi and Bengaluru rising 6.0%, 7.0% and 7.0% next year, respectively.
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