Home prices in India to rise 6.5% in 2025, driven by demand from wealthy: Reuters poll By Reuters
By Rahul Trivedi and Vivek Mishra
BENGALURU (Reuters) – India’s average house price is expected to rise slightly in coming years driven mainly by demand from the wealthy, while rising living costs will put more people out of affordability, a Reuters poll said.
While India’s middle class is bracing, downsizing on everything from tea to two-wheelers due to rising consumer inflation, the richest 1% who own 40% of the country’s wealth eat away at homes in cities with well-paying jobs.
While that’s enough to support price increases in the short term, real estate analysts say there are limits to how well the wealthy can keep demand alive in an already slowing economy.
After rising by 4.3% last year, house prices in India – broadly referring to houses in major cities – were expected to increase by 7.0% this year, 6.5% in 2025 and 7.5% in 2026, average forecasts from on Nov. 12-29 survey Shown 12 real estate market experts.
That opinion hasn’t changed much since the September poll.
“The part that’s driving all these price increases is the luxury part. And this will continue for a long time, but the overall story we’re all seeing is very positive,” said Ajay Sharma, managing director of Valuation Services at Colliers International.
But Sharma said there are clear signs that most people are struggling with the cost of living.
“No one is talking about the problems of the demand structure. If the high quality cream stops buying, it will drop significantly in sales.”
Meanwhile, rents are expected to rise faster than home prices, by 7.5% to 10% next year, according to the median range provided by 11 real estate experts.
“The pressure on home buying will push more people to opt for renting, increasing demand in this segment,” said Sunita Mishra, who leads research at Housing.com and PropTiger.com.
As property developers focus on the luxury market, the shortage of affordable housing continues to sideline many first-time buyers – especially those from the middle and lower income groups.
“The fact that many of the new launches and new stock available in the country’s cities are high-end and high-end can have a profound impact, fueling rental growth,” Mishra added.
While the inability to build enough affordable housing is a common problem in many countries, the scale of the challenge is staggering in India, home to the world’s largest population of over 1.4 billion.
Asked what will happen to first-time home buyers next year, eight real estate experts said it will get worse and only four said it will improve.
A sharp drop in interest rates could ease some of the pressure on home buyers, but economists don’t expect a 50 basis point rate cut from the Reserve. Bank of India (NS:), and it’s not possible until early next year.
(More news from the Q4 global Reuters housing survey)
