INSUBCONTINENT EXCLUSIVE:
Indian house prices set to rise and pick up pace this year and nextBENGALURU: 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."(The) Indian housing market is already a buyer's market, and the pandemic further increased this trend in
2020 and 2021 with consumer preferences largely tilted towards ready homes or those nearing completion," said Anuj Puri, chairman at ANAROCK
Property Consultants.The Indian real estate sector is expected to account for 13 per cent of India's GDP by 2025, according to NITI Aayog,
the official public policy advisory to New Delhi.Construction, which has traditionally been a major employment generator for the largely
unskilled labour force in India, received a special allocation in the February budget.However, there was no clear consensus among analysts
if the allocated 480 billion Indian rupees ($6.3 billion) would be enough to boost affordable housing in India
Five of 10 respondents said it would help, the rest said it would not.For the time being, monetary policy is also helping
The Reserve Bank of India held on to its accommodative stance at its February meeting for the 11th consecutive meeting and kept its repo
rate at a record low of 4.00 per cent.A separate Reuters poll showed the RBI would start raising rates next month, with the repo rate
reaching 4.75 per cent by the end of the next fiscal year, end-March 2023.The median response to a separate question showed the repo rate
would have to rise to that rate by the end of December this year to significantly slow the housing market
Forecasts ranged between 4.50 per cent and 5.00 per cent.
