India’s housing market is likely to struggle throughout 2020 as sluggish demand and a weak economic outlook overpower recent government measures efforts to boost activity, a poll of market experts by news agency Reuters found. House prices rose 5.7 per cent on average in 2018, the weakest since comparable records began in 2010, and data available for last year suggest a much weaker market despite a rapid-fire succession of interest rate cuts from the Reserve Bank of India (RBI).
The poll of 17 property analysts conducted between February 19 and March 2 showed average house prices predicted to rise 2 per cent this year and 2.5 per cent in 2021. That is well below 3 per cent and 4.25 per cent expected in a poll three months ago and only about a third of the latest reported rate of consumer price inflation.
“As long as housing demand remains bereft of major booster shots, the performance will remain patchy in the near-term,” said Anuj Puri, chairman at ANAROCK Property Consultants in Mumbai.
Project delays due to the recent liquidity crisis meant fewer people were buying houses, he said. “There is a dire need to address this concern immediately.”
The economy expanded at its slowest pace in more than six years in the last three months of 2019, with further deceleration expected from the global coronavirus outbreak. That too will not help a market stuck in low gear.
All but one of the 12 analysts who answered an additional question said the latest union budget will have no impact on housing market activity.