India house prices will rise 2.0 per cent in 2019, at half the rate of consumer price inflation, hit by dwindling credit supply, according to a Reuters poll of housing market experts.
House prices have risen at almost double-digit rates for over a decade in a country of 1.3 billion people, where for many, owning a home is still a dream.
Major cities in the country have become some of the most densely populated in the world, reports Reuters.
Asia’s third-largest economy is also grappling with a liquidity crunch after a large lending firm, Infrastructure Leasing and Financial Services (IL&FS), defaulted on a short-term debt payment in June.
The Reserve Bank of India and the government have since tussled over tight liquidity. The government has blamed the central bank and has asked it to ease lending regulations for banks and financial firms.
House prices rose at an average annual rate of 8.5 per cent last year, according to Reuters calculations based on the RBI’s NHB Residex (National Housing Bank Residential index) measure.
The Reuters poll of 14 property market experts, conducted Oct. 29-Nov. 14, showed they expected national house prices to rise 2.8 per cent this year and 2.0 per cent next, around half the rate of the current and expected rate of consumer price inflation.
House prices in Delhi, including the National Capital Region, home to 20 million people, are forecast to fall 2.0 per cent this year and 2.5 per cent next.
Property prices in Mumbai, India’s financial capital, were expected to stagnate this year and next.
For Bengaluru and Chennai, the median forecast was for house prices to gain between 1.0 per cent and a little over 2.0 per cent in the next year.
