Housing Prices Expected to Moderate in the Next Fiscal Year: India Ratings
According to a recent report by India Ratings, housing prices in the top eight cities, including the National Capital Region, Bengaluru, and Mumbai, are expected to moderate to a 3-4% increase in the next fiscal year.
Real EstateHousing PricesIndia RatingsTop CitiesEconomic TrendsReal Estate MumbaiJan 28, 2025
The report predicts that housing prices in the top eight cities will moderate to a 3-4% increase in the next fiscal year.
This comes as a relief to potential buyers who have been witnessing steady price hikes in recent years.
The National Capital Region, Bengaluru, and Mumbai, which are among the most active real estate clusters, are expected to see this moderation in price growth.
The report highlights several factors contributing to this trend, including a slowdown in demand, increased supply, and economic uncertainties.
of India Ratings
India Ratings and Research (Ind-Ra) is a leading credit rating agency in India, providing independent credit ratings and research.
With a strong presence in the financial market, India Ratings is known for its comprehensive analysis and forecasts on various sectors, including real estate.
Factors Contributing to Moderation in Housing Prices
1.
Slowdown in Demand The demand for housing units has been sluggish in recent quarters due to economic uncertainties and the ongoing pandemic.
Potential buyers are becoming more cautious, leading to a decrease in demand.
2.
Increased Supply There has been a significant increase in the supply of new housing units in the market.
This surplus is putting downward pressure on prices, as developers are offering competitive deals to attract buyers.
3.
Economic Uncertainties The global and local economic environment remains uncertain, which has led to a cautious approach among investors and buyers.
This uncertainty is expected to persist in the near future, further moderating price growth.
4.
Government Policies Recent government policies, such as the introduction of the Real Estate (Regulation and Development) Act (RERA) and the Goods and Services Tax (GST), have brought more transparency and accountability to the sector.
However, these changes have also increased the compliance costs for developers, which may have a marginal impact on prices.
Impact on Major Cities
- National Capital Region (NCR) The NCR is expected to see a moderate increase in housing prices due to its robust infrastructure and economic activities.
However, the surplus supply of housing units is likely to keep prices in check.
- Bengaluru Known for its IT industry, Bengaluru has a strong demand for housing.
The city is expected to see a moderate price increase, driven by ongoing infrastructure projects and economic growth.
- Mumbai Mumbai, being the financial capital of India, has always been a hotspot for real estate.
However, the city is expected to see a more muted price growth due to the high base and increased supply.
Conclusion
The moderation in housing price growth in the next fiscal year is a positive sign for potential buyers and the overall real estate market.
It reflects a more balanced and sustainable growth trajectory.
While the market continues to face challenges, the measures taken by the government and the increased transparency are expected to stabilize the sector in the long term.
For more detailed insights and analysis, refer to the full report by India Ratings and Research.
Frequently Asked Questions
What is the expected growth in housing prices in the next fiscal year?
According to India Ratings, the expected growth in housing prices in the next fiscal year is 3-4%.
Which cities are expected to see a moderation in housing price growth?
The National Capital Region, Bengaluru, and Mumbai are among the top cities expected to see a moderation in housing price growth.
What factors are contributing to the moderation in housing prices?
The factors contributing to the moderation in housing prices include a slowdown in demand, increased supply, economic uncertainties, and government policies.
How has the Real Estate (Regulation and Development) Act (RERA) impacted the sector?
RERA has brought more transparency and accountability to the real estate sector, but it has also increased compliance costs for developers, which may have a marginal impact on prices.
What is the role of India Ratings in the real estate market?
India Ratings and Research (Ind-Ra) is a leading credit rating agency in India that provides independent credit ratings and research, including forecasts on the real estate sector.
Related News Articles
Understanding the Revised Long-Term Capital Gains Tax Structure for Real Estate
Decoding real estate gains and losses under the revised long-term capital gains tax structure, and its impact on investors and property owners
Mahindra Lifespace Developers Targets Rs 1500 Crore Fundraising - ET Realty
Mahindra Lifespace Developers (MLDL), the real estate and infrastructure development arm of the Mahindra Group, is set to raise Rs 1,500 crore to bolster its expansion plans.
Knowledge Realty Trust Set to Launch Rs 6,200 Crore IPO: A Major Move in the Real Estate Sector
Knowledge Realty Trust, one of the leading players in the Indian real estate market, has filed a Draft Red Herring Prospectus (DRHP) to launch an IPO worth Rs 6,200 crore. This move positions the Trust as the second-largest office real estate investment t
BMC's Sweetener Policy Triggers a Diabetes Crisis for Mumbai Real Estate
The recent policy by BMC to offer sweeteners to real estate developers has inadvertently led to a 'diabetes' crisis in Mumbai's real estate market. Builders are now facing significant challenges, and the market is struggling to adapt.
Capital Values Outpace Rentals in Bengaluru, MMR, NCR, and Hyderabad
A recent study by real estate consultancy Anarock reveals that capital values in Bengaluru, MMR, NCR, and Hyderabad have surpassed rental values, indicating a robust market trend. In contrast, Pune, Kolkata, and Chennai have experienced higher rental valu
Housing Sales Slump in Bengaluru and Delhi-NCR as Prices Rise and Job Insecurity Grows
The real estate market in Bengaluru and Delhi-NCR is experiencing a significant downturn, with housing sales dropping due to employment uncertainties and increasing property prices.