representative image New Delhi: India’s residential real estate market may see an increase in affordability changes, driven by anticipated interest rate cuts. reserve Bank of India ,reserve Bank of India), a report by JLL Said.
The decision of cumulative 50 basis points (bps) rate cuts over time will provide relief to home buyers, reversing affordability challenges caused by stable interest rates and rising property prices from 2022.
According to JLL’s Home Purchase Affordability Index (HPAI), repo rate cuts in the next few months could boost affordability in most housing markets by 2025, except Delhi NCR And Bengaluru,
While Kolkata is set to retain its position as the most affordable market with a potential affordability peak, cities like Mumbai and Pune are expected to reach optimum levels.
According to the report, the residential market is currently experiencing a sustained uptrend, driven by the growth of home ownership mobility. This momentum has led to steady growth in sales and accelerated project launches.
According to JLL, residential sales are expected to reach an impressive 305,000-310,000 units in 2024, with further growth expected in 2025, potentially creating a new peak at 340,000-350,000 units.
The report further said that although rate cuts before the end of 2024 are uncertain, experts estimate a total cut of 50 bps within the next 12 months.
This monetary easing is expected to reduce borrowing costs across the economy, benefiting homebuyers and developers alike, the report said.
According to the report, Mumbai and Pune are projected to reach peak affordability levels by 2025, while Kolkata is expected to retain its position as India’s most affordable market among major cities, potentially reaching new affordability peaks. But will reach.
Meanwhile, southern markets like Delhi NCR and Bengaluru, HyderabadAnd Chennai Affordability levels are also likely to see improvement on a year-on-year basis, although it will remain below its peak values.
“Expected interest rate reductions, coupled with moderate price growth and sustained income growth, are expected to create a favorable home buying environment over the next 12-18 months, with affordability levels for all cities at their best since 2022.” “Homebuyer behavior is expected to remain buoyant and market activity is expected to have a long and flexible runway, even as it continues to improve,” said Dr Samantak Das, Chief Economist and Head of Research and REIS, India. Stay.” JLL.
According to the report, considering 2011 as the base year, Hyderabad leads the value growth with a growth of 132 per cent, followed by Bengaluru at 116 per cent and Delhi NCR at 98 per cent. On the income front, Mumbai has seen the highest growth of 189 per cent, with Pune and Hyderabad growing by 173 per cent and 163 per cent respectively in the same period.
“The combination of healthy income growth, potential interest rate cuts and moderate price growth is expected to improve affordability levels over the next 12 months, paving the way for sustained market activity and a strong India’s residential real estate sector in the medium term. The demonstration will continue,” said. Shiva KrishnanSenior Managing Director (Chennai & Coimbatore), Head – Residential Services, India. JLL.
