Luxury property frenzy set to drive up home prices in India: Reuters poll
Home prices in India are set to rise steadily over the next few years, driven by demand for luxury properties from cash-rich individuals, according to a Reuters poll of housing experts who forecast rent increases will outpace consumer inflation.
While economic growth in Asia's third-largest economy is likely to outpace its major peers, policy experts warn the benefits are increasingly being funnelled to a select few, leaving millions of job-seekers, especially young people, out of the growth story.
With a supply of affordable homes dwindling and those with cash cornering the property market, many aspiring first-time buyers are being forced to keep renting.
After growing 4.3% last year, national home prices in India were expected to rise 7.75% this year, an upgrade from the 6.0% predicted in May, according to the median forecast from the Aug. 20-Sept. 2 survey of 16 property market experts.
Home prices are then expected to increase 6.0%-6.25% in the next two years. Average home prices in India broadly refer to housing in major cities.
«Housing demand is heavily tilted towards the luxury housing segment. This maintains a seemingly unstoppable growth curve while affordable housing continues to bleed,» said Anuj Puri, chairman at ANAROCK Property Consultants.
«Tellingly, there was no new affordable supply. It is little wonder that developers are aligning supply with the prevailing demand and are launching more luxury housing projects now.»
In a country of over 1.4 billion people, demand for housing is driven by a
