NEW DELHI: Growth in housing prices is expected to be nominal in short to medium term after rising sharply over the last two years due to surge in demand post the COVID pandemic, according to Cushman & Wakefield India head Anshul Jain.
In a video interview with PTI, Jain, the Chief Executive India & South East Asia and APAC Tenant Representation, Cushman & Wakefield, said the housing demand would continue to be strong in view of high economic growth and a growing desire to own homes among consumers especially, young population.
“Housing demand in India was quite muted from 2013-2014, all the way to 2019. The prices were stagnant. There was a wave at that point in time, where people, particularly youngsters did not want to own anything. We were talking about Uberisation of the residential sector where people wanted to rent and did not want to sort of make a commitment,” Jain said.
However, he noted that the COVID pandemic changed that mindset.
“People realized the stability of having their own house. Plus people wanted larger houses, and combining that with one of the lowest interest rate regimes India had seen for a while really spurred the demand for housing,” he said.
Jain noted that housing sales and prices went up driven by end-user demand.
“Seeing the prices going up, the investors came into the market. So, a combination of that became a perfect cocktail, for a very strong demand post COVID from a housing perspective,” Jain observed.
Going forward, he said there would be nominal growth in prices.
“… Clearly there has been a very significant price rise in the last two years. But if you normalize that, over about 10 odd years, 2013- 2014 to now, I think the price rise has still been strong, but not abnormal.
“Having said that, what we have seen is a very steep price rise. I think for the next one or two years, you are probably going to see a little bit more stability in price rise. But the demand, I think will continue, as we kind of move forward in the next few years,” Jain said.
Asked whether prices have not yet peaked and there could be further rise, Jain said the prices have risen sharply post COVID.
“So, when you go through such a steep cycle, you expect stability to happen at a certain point in time. So, my expectation is we are near the high point of the market right now… We’ll see nominal growth in the market right now, I do not expect the market to kind of double again in the next two years. But there will be nominal growth…,” Jain said.
The nominal price rise would be driven by normal market parameters such as inflation, and normal demand, he added.
According to various market reports by property consultants and real estate data firms, India’s housing market has revived sharply post COVID.
Sales were at an all-time high last calendar year, while prices have risen by an average 10 per cent annually across eight major cities.
However, prices in many micro markets have gone up sharply by 40-70 per cent in the last two calendar years.
Housing demand is getting shifted towards reputed builders who have a decent track record of delivering the projects.
