By Vivek Mishra
Bengaluru (Reuters) – The average housing prices in India and rent costs are designed to outrun consumer inflation this year, according to a Reuters poll into housing experts who have been divided whether accessibility to home buyers will get worse or improve.
While economic growth, stagnant salaries and the shortage of well -paid jobs, left millions of working -class families with exhausted savings, housing prices have almost doubled in the last decade in the housing market, dominated and driven by those with high incomes.
In addition, a mismatch between high demand and limited supply accumulates housing prices to the point where tens of millions need to be hired.
The average home prices in India will increase by 6.5% this year and 6.0% thereafter, after an increase of about 4.0% last year, according to the average forecasts in a survey on February 17 from March 4 to 14 experts in the real estate market.
This perspective was hardly changed by a poll in December, taken before the Reserve Bank of India begins to reduce interest rates in what is expected to be a short and shallow cycle.
The cost of renting in the cities had to rise even faster, jumping 7.0% -10.0% next year. Such an increase would ahead of consumer inflation, which is expected to average 4.3% and 4.4% in the next two fiscal years, according to a separate Reuters study.
As the rents are raised, the road to home ownership is even steeper, as buyers are struggling for the first time to save for advance payment.
“This is a double bite: housing prices will outstrip inflation and rents are already increasing in years. For millions, I think the ownership of housing is becoming a distant mirage,” says Pankai Kapur, managing director of the Liases Fora real estate company.
“There is not only one problem; there are many. In short, economic growth does not turn into higher incomes and jobs. Instead we see a home market where only wealthy can buy. I don’t think this trend will change soon.”
Ajay Sharma at Colliers International and Atif Khan in CBRE were in broad agreement.
The average housing prices in the two most populated cities in India, Mumbai and Delhi – including its surrounding national capital – are expected to increase between 5.8% and 8.5% this year and the next, while prices in Bengaluru and Chenia are estimated to increase 5.0% -7.3%.
Asked what would happen to the accessibility for home buyers for the first time next year, experts in the real estate market were separated, with the seven saying that the seven would improve, saying they were getting worse.
“With these pricing escalations, buyers’ accessibility for the first time will decrease as increasing costs are ahead of income growth, which makes home ownership more challenging in the capital’s high-request regions,” said Arvind Nandan, Managing Director of Savills India research.