Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
India's residential real estate market is poised for improved affordability, driven by anticipated RBI interest rate cuts of 50 basis points within the next year. JLL's report predicts affordability gains across cities like Kolkata, Pune, and Mumbai by 2025, while Delhi NCR and Bengaluru may lag behind peak affordability levels. Residential sales are expected to hit a record 350,000 units by 2025, fueled by moderate price growth and rising incomes. Hyderabad and Bengaluru lead in price growth since 2011, while Mumbai tops in income growth. The rate cuts, combined with stable prices, will sustain market momentum and support long-term resilience.
India's residential real estate market is expected to experience a shift towards increased affordability, driven by anticipated interest rate cuts by the Reserve Bank of India (RBI), according to a report by JLL. The report suggests that a cumulative 50 basis point (bps) reduction in rates over time would provide relief to homebuyers, addressing the affordability issues caused by stagnant interest rates and rising property prices since 2022. Advertisement
JLL's Home Purchase Affordability Index (HPAI) indicates that the anticipated repo rate reductions in the coming months could enhance affordability in most housing markets by 2025, with the exception of Delhi NCR and Bengaluru. Kolkata is projected to remain the most affordable market, potentially reaching new affordability peaks, while cities like Mumbai and Pune are expected to approach optimal affordability levels. Meanwhile, residential sales are expected to reach between 305,000 and 310,000 units in 2024, with further growth in 2025, potentially reaching a new peak of 340,000 to 350,000 units.
Although a rate cut before the end of 2024 remains uncertain, experts anticipate a 50 bps reduction within the next 12 months. This easing of monetary policy is expected to reduce borrowing costs, benefiting both homebuyers and developers.
The report further reveals that while affordability in Delhi NCR and southern cities like Bengaluru, Hyderabad, and Chennai is expected to improve on a year-on-year basis, these markets will still remain below their peak affordability levels. According to Dr. Samantak Das, Chief Economist and Head of Research and REIS, India at JLL, the anticipated interest rate cuts, combined with moderate price growth and sustained income increases, will foster an environment conducive to home purchases over the next 12 to 18 months. He added that affordability levels across all cities are expected to improve to their best since 2022, which will maintain buoyancy in homebuyer behaviour and ensure long-term market resilience.
In terms of price growth since 2011, Hyderabad leads with a 132 per cent increase, followed by Bengaluru with 116 per cent and Delhi NCR at 98 per cent. On the income front, Mumbai has seen the highest growth at 189 per cent, with Pune and Hyderabad following at 173 per cent and 163 per cent, respectively.
Siva Krishnan, Senior Managing Director (Chennai & Coimbatore) and Head of Residential Services, India at JLL, noted that the combination of healthy income growth, potential interest rate cuts, and moderating price growth would improve affordability over the next 12 months. This is expected to sustain market activity and support strong performance in India's residential real estate sector in the medium term.
The anticipated interest rate cuts by the RBI, alongside healthy income growth and moderating property prices, are expected to significantly improve affordability in India's residential real estate market. While some cities like Kolkata and Pune will see better affordability levels, others, such as Delhi NCR and Bengaluru, may still lag behind their peak affordability levels. However, overall, these developments are likely to sustain the growth momentum in the residential market, providing a more favourable environment for homebuyers in the near future. This combination of factors ensures continued strong performance in the sector, benefiting both homebuyers and developers.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
