Will property prices crash in India due to the Coronavirus outbreak?
“India’s mainstream residential prices have largely remained stable with negative bias, despite recovery being impacted due to the second wave. Moving forward with the downward trajectory in COVID-19 cases and mass inoculation drive, the sector is expected to make a healthy recovery, with demand for homes only expected to increase in the coming quarter,” said Shishir Baijal, CMD, Knight Frank India.
Will the housing market crash?
While the popular belief was that property market in India would crash due to the tremendously adverse impact of the many waves of the coronavirus pandemic, those predictions now assume the status of simple, wishful thinking. Data show so. While there is no denying that housing affordability in India has improved remarkably since the onset of the pandemic in March 2o20, the price correction in India’s real estate sector can hardly be termed a crash. Numbers are quite telling here.
According to a Reuters poll conducted between August 11 and 24, 2021, house prices in India would grow by an average of 2.5% nationwide this year. Three months ago, the Reuters poll had predicted only a 0.75% growth in property prices. The poll also predicted that average Indian house prices were set to increase by 4.5% in 2022 and 5.5% in 2023, mainly because the cost of purchasing raw materials for constructions for builders was likely to spiral.
Price growth: City-wise break-up
|City||Average price as on June 30, 2021 (in Rs per sq ft)||Annual growth in %|
Source: Real Insight: Q2-2021