Housing prices may rise 8% this fiscal: Report
Premium- Between adapting to the pandemic’s impact, industry issues and government policies, the Indian real estate sector anticipates a robust end-user demand in FY23, India Ratings said.
India Ratings and Research (Ind-Ra) has maintained an improving outlook for the residential real estate for FY23, expecting the growth and recovery momentum in the market (witnessed in FY22) would continue into this fiscal.
"Between adapting to the pandemic’s impact, industry issues and government policies, the Indian real estate sector anticipates a robust end-user demand in FY23," India Ratings said.
"The steady performance and quick revival in FY22 have likely helped the sector regain buyer’s trust," it said.
The ratings agency expects the housing growth momentum to continue on the back of a strong demand in FY23.
It sees that housing sales to rise around 12% yoy in FY23. In FY22, for the top eight real estate clusters, housing sales increased 42% yoy on a pandemic-impacted lower base.
In FY23, it expects well-known and trusted developers to witness better sales, and affordable housing segments to continue to claim around 50% share of the total sales.
It further said expects housing prices to appreciate by 8% this fiscal, mainly due to rise in demand from end users.
"The current housing sales uptick and increased demand is end user driven and not speculative. Hence, the hike in prices will be sustainable and is likely to be incremental. Prices were up 6 per cent pan-India in FY22," the rating agency said.
Furthermore, the surge in the housing sales in India has not been accompanied by a sharp rise in prices so far, it added.
"After a prolonged period of decline, prices stabilised in the past few years. Ind-Ra expects the price appreciation of residential property in FY23 to be around 8% at pan-India level, led by Bengaluru, Mumbai, Pune and Hyderabad," the statement noted.