Image Source : The Realty Today
India’s housing market is projected to see a steady increase in home prices over the next two years, with a Reuters poll forecasting a 6.0% rise in 2025 and a 5.0% increase in 2026. This marks a slight downward revision from the March poll, which had estimated a 6.5% gain in 2025 and 6.0% in 2026. The outlook reflects ongoing demand from high-income buyers, limited housing supply, and inflationary pressures affecting affordability.
Key Highlights Of India’s Housing Market Forecast
- Home prices are expected to rise 6.0% in 2025 and 5.0% in 2026, slightly lower than previous estimates
- The luxury housing segment continues to drive price increases, while affordability remains a challenge for middle-income buyers
- Rental costs are projected to climb even faster, with urban rents expected to rise between 7.0% and 10.0% over the next year
- Mumbai and Delhi home prices are forecast to increase between 5.8% and 8.5% in the next two years, while Bengaluru and Chennai may see gains of 5.0% to 7.3%
- Inflation is expected to average 4.3% and 4.4% over the next two fiscal years, making homeownership increasingly difficult for first-time buyers
Demand-Supply Imbalance And Affordability Concerns
The Reuters poll highlights a growing disparity between housing demand and supply, particularly in major cities. While high-income buyers continue to drive price increases, stagnant wages and rising inflation have made homeownership unattainable for many middle-class families. The shortage of affordable housing remains a pressing issue, with India facing a deficit of over 10 million housing units.
Rising Rental Costs And Market Trends
- Urban rental prices are expected to rise between 7.0% and 10.0% over the next year, outpacing inflation
- The increasing cost of renting is making it harder for first-time buyers to save for a down payment
- Developers are focusing on luxury housing, sidelining middle-income buyers and exacerbating affordability challenges
Future Outlook And Policy Considerations
- Analysts anticipate continued price increases, driven by strong demand and limited supply
- Government initiatives aimed at boosting affordable housing may help mitigate price pressures
- The Reserve Bank of India’s monetary policy decisions will play a crucial role in shaping housing market trends
Sources: Reuters, Economic Times, Realty Today.
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