Housing Prices To Fall In 2019: Reuters Poll
Even as more people show willingness to invest in real estate, rates of property are likely to witness a decline next year, a poll by new agency Reuters show. According to the pool, national capital Delhi may be worst-hit when rates go falling owing to inflation and credit supply downturn. The liquidity crunch in the sector, on the other hand, would lead to interest rate rising, increasing the cost of borrowing.
The Reuters poll that was conducted between October 29 and November 14 showed national house prices will rise 2.8 per cent this year and 2.0 per cent in 2019, around half the rate of the current and expected rate of consumer price inflation. If that is so, the price rise will still be the lowest in a decade.
On a positive note, however, real estate, which is emerging from the triple tsunami of demonetisation, the goods and services tax and the Real Estate Act, might actually benefit from softening property rates.
In the national capital, the poll forecasts, property rates might fall 2.0 per cent this year and 2.5 per cent next, the highest for any city. Most experts blame the future drop in prices of overvaluation in a market, where pollution has buyers worried. Next year, prices in Mumbai may also stagnate. In Bengaluru and Chennai, prices may gain between one to two per cent over this year and the next, the poll shows.
Analysts also suggest that most of the property markets in India are overvalued which shuts new buyers from entering the market.