Home prices in India are reportedly expected to climb steadily in the coming years. This is primarily owing to the high demand for luxury properties from affluent buyers. This might also send rents at soaring levels.
As per a Reuters survey, housing experts believe that rent hikes will surpass the rate of consumer inflation.
India's economic growth is, quite evidently, set to outstrip that of its major peers. Still, policy experts warn that this progress is mainly benefiting a small portion of the population, the report said. As a result, millions of job-seekers especially young people are left "out of the growth story." With affordable housing becoming increasingly scarce, many first-time buyers have no choice but to continue renting.
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Property Market in Figures
Home prices in India, which rose by nearly 4.3 per cent last year, are now projected to increase by 7.75 per cent this year. The increase was earlier predicted to be at 6 per cent. This revised estimate reportedly comes from a survey of 16 property market experts conducted between August 20 and September 2.
As for the coming two years, home prices are expected to grow by 6 per cent to 6.25 per cent. This projection primarily reflects trends in housing markets across major cities in India.
The demand is primarily driven by a small group of affluent buyers. The enormous scale of the market provides developers with strong incentives to cater to the ultra-wealthy, especially as profit margins in the affordable housing segment become tighter, the report added.
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According to Knight Frank's wealth data, ultra-high-net-worth (UHNIs) individuals in the country generally own more than two properties, and nearly 12 per cent plan to purchase another home this year.
The surge in demand among the affluent class continues to drive up prices, giving rise to affordability issues.
