India’s housing market will remain resilient despite rising interest rates and a weak global economic outlook, according to a Reuters poll of property analysts who have barely changed their forecasts from three months ago.
Defying a global trend of falling housing prices as mortgage rates rise and crimp affordability, India has exhibited resilience and is emerging from a decade-long downturn due to strong demand.
A major source of employment in a country of 1.4 billion people where a majority are unskilled, the Indian housing market is likely to remain a stable contributor to economic activity in Asia’s third-largest economy.
Average home prices were forecast to rise 5.5% and 5.0% this year and next, poll medians from a Feb. 16 to March 3 survey of 13 property market experts showed.
Those expectations were largely unchanged from a December survey, slightly outpacing consumer price inflation projections of 5.1% and 4.5% for fiscal years 2023/24 and 2024/25, respectively, a separate Reuters poll showed.
“Post the COVID-19 pandemic, the urge to own a house is higher than ever and thus, the residential segment has witnessed strong demand,” said Divyesh Shah, associate director at CARE Ratings.
“While rising inflation and interest rates may impact demand to a certain extent in the near-term, the industry is however poised for steady growth in the coming 2-3 years and thus home ownership is likely to increase.”