Home Prices: India's housing market is expected to witness another sharp rise in prices as the demand for premium housing steadily grows. According to a Reuters poll, average home prices in the country are likely to climb in the coming years, thanks to affluent buyers.
What can further exacerbate the situation is the rising living costs. This might make property ownership increasingly unattainable for many.
Meanwhile, rents are also expected to rise at a similar pace. Some experts even believe that these price figures could even increase faster than home prices. According to a report based on insights from 11 property experts, rents could climb by 7.5 per cent to 10 per cent over the next year.
The report also mentioned that India’s middle class is cutting back on other things as they feel the pinch of soaring inflation. It's largely the wealthy class that is keeping the housing prices high as for now.
While this trend may drive price increases in the short term, property analysts caution that the wealthy alone cannot sustain demand indefinitely in an economy already losing momentum.
Slowing Economic Momentum
The recent GDP data indicated a much slower growth trend being played out. India's economy reported a lower-than-expected growth figure of 5.4 per cent in the second quarter of FY25. This was the lowest quarterly growth figure recorded in nearly two years.
"With a subdued H1 behind us, a more promising H2 lies ahead. We revise our FY25 real GDP growth forecast down by 40 basis points to 6.6 per cent year-on-year, reflecting near-term softness in indicators, and project 6.4 per cent for FY26," as per SBI CAPS Report.
The global stage is set for more pronounced challenges next fiscal, as the ripple effects of a global slowdown and potential disruptions from Mr. Trump’s proposed tariffs play out against a backdrop of heightened geopolitical tensions, the report further added.
