Property rates across markets in India are rising owing to robust demand from homeowners, favourable interest rates and a swift economic recovery. During the first half of 2022, housing prices increased on a year-on-year basis for the first time since the first half of 2015, according to an Economic Times report.
Prices rose 3-9% from last year across the top 8 markets in the first six months of 2022. While Mumbai and Bengaluru prices surged 9% each from the year-ago period, property rates increased by 7% each in National Capital Region and Pune, according to data from Knight Frank.
“Home buying has witnessed a strong rebound since the advent of the pandemic and continues despite inflationary concerns in the economy. The interest rate cycle having turned during this period has impacted affordability, but the performance of the broader economy and changed buyer perceptions have had a greater bearing on market momentum for the remainder of the year as it dictates homebuyer income levels and demand much more directly,” said Shishir Baijal, CMD, Knight Frank India.
With 158,705 units sold in the period ended June 2022, home sales were the highest since the second half of 2013 for any half-yearly period; registering a growth of 60% on a year-on-year basis during the first half of 2022.
Interest rates which remain low despite two successive rate hikes since June are expected to be increased further by the Reserve Bank of India in a bid to contain galloping inflation that has stayed outside the central bank’s tolerance band of 2-6% for the last few months.
