Residential property prices across India’s major markets are expected to rise in the second half of this financial year as sales momentum is expected to pick up pace with an increase in demand.
The downtrend in prices was arrested with some markets witnessing an increase in demand. “In the past five years, bigger residential markets like Delhi-NCR (National Capital Region) and Bengaluru saw a marginal dip in average property prices while Mumbai, Pune and Hyderabad witnessed 2-3% rise in average prices, said a recent report by 360 Realtors and Liases Foras.
“By the middle of FY 2020, market sentiments are expected to further change with acceleration in price growth. As demand will spiral upwards, prices will rise,” said the report.
Hyderabad emerged as the healthiest market for real estate in 2018-19, according to the report, and it is expected to be one of the fastest growing residential markets in the current fiscal. In the last quarter of the previous fiscal, Bengaluru witnessed highest growth with 4% quarter-on-quarter increase in total sales to around 8,800 while Delhi-NCR saw 3.5% growth to over 13,270 units. Other markets such as Pune and Mumbai saw marginal growth of 1.3% and 0.1% respectively in sales, at 11,200 units and 18,000 units, during the last quarter of 2018-19.
“Sales volume is coming back and, despite flattish market, we have seen price moving up in our projects. In the current fiscal we expect prices in the existing and upcoming projects to see higher than inflation growth,” said Anand Narayanan, COO, Puravankara.
To give a boost to the sector, the government and the Reserve Bank of India are taking positive steps. The RBI has cut rates twice in 2019 to bring down repo rate to 6%. “The central bank has shown a positive stance by announcing a reduction in key lending rates. Home buyers now stand to benefit by having a higher purchasing power, enabling them to buy premium homes of their choice,” said Om Ahuja, chief operating officer-residential business, K Raheja Corp.
This year will see increased vigour stemming from policy overhauls, stabilisation of prices and rising demand, according to experts. Some buyers may defer their buying decisions owing to the ongoing general election. Besides, the sector is expected to feel liquidity crunch in the first half of 2019 and new housing project launches are likely to remain muted.