Indian Home prices to fall 6% this year, risk to downside

[Gaali_Gottam_Govinda]

Indian house prices will fall more sharply this year than expected just three months ago amid surging coronavirus cases which are hurting demand in an economy fighting its deepest recession on record, a Reuters poll showed.

 

Hyderabad: India has been ranked at the 54th spot amongst the 56 countries and territories, in terms of appreciation in residential real estate prices, with a decline of 1.9 percent year-on-year (YoY). According to Knight Frank’s latest research, the country has moved down 11 spots in the global index, from 43rd rank in the first quarter of 2020 to 54th rank in the second quarter. Indian house prices will fall more sharply this year than expected just three months ago amid surging coronavirus cases which are hurting demand in an economy fighting its deepest recession on record, a Reuters poll showed.

The Global House Price Index tracks the movement in mainstream residential prices across 56 countries and territories worldwide using official statistics.

Even before the pandemic struck, house prices had declined nearly 1% during the January-March period from the previous quarter, according to Reserve Bank of India data. That is with consumer inflation averaging 6.67% during that same period.

Most new housing projects are either unsold or delayed due to the coronavirus spreading in the country at the fastest rate in the world - causing massive job losses, pay cuts in almost every sector and migration of labour out of top-tier cities.

That gloomy job market was likely to hurt demand and already-slowing housing market activity, suggesting a recovery would not come any time soon, according to the Sept. 16-28 Reuters poll of 15 analysts.

The poll predicted average house prices to shrink 6.0% this year and 3.0% next year, which would be the first annual fall since records began over a decade ago. That compares to a fall of 5.0% and 3.0% expected in a poll taken three months ago.

“The COVID-19 impact has hit the residential sector hard and while green shoots are emerging in terms of sales activity, it is largely focused on completed and ready to move inventory,” said Rohan Sharma, head of research at Cushman Wakefield.

“Under-construction and unsold inventory remain under a slight stress.”

In a worst-case scenario, prices nationally were expected to decline 10.0% and 7.0%, this year and next, respectively.

Shishir Baijal, CMD, Knight Frank India said, “The residential sector has been impacted by low demand across most markets in India. Further, the slowdown due to the pandemic in the global economy has adversely affected the real estate sector and the purchasing power of homebuyers.”

Whilst a lot will depend on when the economy opens up completely, the current softening of prices can be beneficial for the end users to make their purchase decisions. Further, lower home loan interest rate, can provide the right motivation for house purchase, added Baijal.

While house prices were expected to decline, retail inflation held above the central bank’s medium-term target range of 2-6% for the fifth consecutive month in August, giving little room for the RBI to support the economy.

Nine of 12 respondents who answered an additional question said the risk to their housing market outlook was skewed more to the downside. Nine of 13 analysts predicted the recovery from the recent slowdown to take at least a year.

“There is still a fair bit of uncertainty on the extent and duration of the disruption caused by COVID-19,” said Aashish Agarwal, head of India real estate at SayeNvest.

A regional breakdown in the poll showed house prices this year would fall 7.5%, 7.0%, 5.0% and 3.5% in Mumbai, Delhi, Chennai and Bengaluru, respectively, compared to 7.3%, 7.0%, 3.0% and 3.0% contractions predicted in the June survey.

“The residential segment has taken a hit due to demand flattening out in most cities,” said Ajay Sharma, managing director at Colliers International.

“If the festive season recovery does not happen, then the pricing of 2020 will continue well into 2021,” he added.

[AndhraneedSCS]

rents taggistara?

[Peddayana]

India lo market antha hype meeda nadustundi man , ee news anni work out avvavu 

evvadu rates taggincharu , lot of big money circulates in that market 

real estate is like a second job there for most households now..

 

[JambaKrantu]

Hyderabad is going like crazy. Ekkada chusina new apartment projects starting, most of the villas are getting sold during foundation stage itself

 

[csrcsr]

16 minutes ago, Peddayana said:

India lo market antha hype meeda nadustundi man , ee news anni work out avvavu 

evvadu rates taggincharu , lot of big money circulates in that market 

real estate is like a second job there for most households now..

 

Paisaku ekad ninchi vadtunayi??

[snoww]

51 minutes ago, AndhraneedSCS said:

rents taggistara?

Already thaggayee koncham . Specially IT dominated areas. 

 

[Peddayana]

6 minutes ago, csrcsr said:

Paisaku ekad ninchi vadtunayi??

I'm assuming this - taxes middle class tappa evvadu kattadu ,  nobody reports income anymore , so imagine all that unaccounted money

however , hyd apts are still a mystery to me , IT areas lo 1.2 , 1.3 cr untunnayi , not sure who affords this and how?

assuming you will get a loan 3-4x of salary , Salaries should be 40L then which I don't think many people will have in India , so people buying must be some one who does business?

Oka apt complex lo 900 apartments almost 1cr tho potunnayi Kukatpally lo , its insane when you think how much people are spending

 

[k2s]

Nice

[manadonga]

1 hour ago, AndhraneedSCS said:

rents taggistara?

rents baaga taggayi hyderabad and vijayawada la lo 

[divvu]

black money invests in real estate mostly.. not everyone buys for living.

[Ryzen_renoir]

12 minutes ago, Peddayana said:

I'm assuming this - taxes middle class tappa evvadu kattadu ,  nobody reports income anymore , so imagine all that unaccounted money

however , hyd apts are still a mystery to me , IT areas lo 1.2 , 1.3 cr untunnayi , not sure who affords this and how?

assuming you will get a loan 3-4x of salary , Salaries should be 40L then which I don't think many people will have in India , so people buying must be some one who does business?

Oka apt complex lo 900 apartments almost 1cr tho potunnayi Kukatpally lo , its insane when you think how much people are spending

 

Long term loans , people selling properties back in villages to  put the payment down.  

Government officials black money , politicians , sleazy business men ,etc 

[Ryzen_renoir]

Just now, divvu said:

black money invests in real estate mostly.. not everyone buys for living.

Especially in NCR region , they sold apartments worth 30 crores in noida which is unheard of down south . 

Rent to price ratio in NCR is close to 1:1000 in many places , which makes absurdly cheap to rent than purchase . Central government employees , judges , lawyers , politicians of all parties ,etc  pump so much money into NCR real estate it has it almost impossible to buy a property over threre

[Peddayana]

21 minutes ago, Ryzen_renoir said:

Especially in NCR region , they sold apartments worth 30 crores in noida which is unheard of down south . 

Rent to price ratio in NCR is close to 1:1000 in many places , which makes absurdly cheap to rent than purchase . Central government employees , judges , lawyers , politicians of all parties ,etc  pump so much money into NCR real estate it has it almost impossible to buy a property over threre

yeah , rent to price ratio is also insane in areas like Hyd , youtube lo oka video choosa , 9cr property anta , rent is around 2L per month , which I must say is very low

Ikkada invest chesina houses lo you will get way more rent , but on the downside property value appreciation India type lo every 3-4 years ki double avvadu ikkada 

[manadonga]

3 minutes ago, Peddayana said:

yeah , rent to price ratio is also insane in areas like Hyd , youtube lo oka video choosa , 9cr property anta , rent is around 2L per month , which I must say is very low

Ikkada invest chesina houses lo you will get way more rent , but on the downside property value appreciation India type lo every 3-4 years ki double avvadu ikkada 

yes 

ippudu hyd lo 1 cr house ki rent 10000 to 15000 madhya lo vundi 

[Assam_Bhayya]

1 hour ago, snoww said:

Already thaggayee koncham . Specially IT dominated areas. 

 

next 6 months lo malla back ravalsindhe kaka, honeymoon laantivi kodhi rojule untayi. . . Hyd lo Metro, buses and every other thing opened except movie theatres and schools/colleges. Online learning is not a learning asalu adhi chadhuvee kaadu. . . enni nelalu/years itlaa untadhi. . . .