June 6, 2023: Property prices in India are likely to show growth higher than the consumer price-based inflation, shows a poll by news agency Reuters. Also, interest rates are expected to stay higher for a longer period than earlier forecast, the May 16-June 1 poll of 12 property analysts predicts.
Average home prices in India were expected to rise by 5.5% in 2024 and in 2025, outpacing consumer price inflation forecasts of 5.1% and 4.8% for FY24 and FY25, respectively.
The repo rate is expected to stay at its current level of 6.50% for the remainder of 2023. The Reserve Bank of India may go for a rate cut only in 2024, the analysts expect.
Meanwhile, the RBI’s All-India Home Price Index (HPI) rose 4.57% to 303.9 as of March 2023 as against 290.6 in March 2022, indicating that price rise is continuing across the metros despite the 250-basis point hike in the repo rate in 2022. On a sequential basis, the all-India HPI increased by 0.6% in Q4FY23, showing sequential increase in seven of the cities.
The RBI’s home index is based on transaction-level data received from the registration authorities in top 10 major cities, including Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai.
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