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India's house prices will rise steadily in the next few years roughly in line with overall economic growth, with low chances of a significant slowdown over the coming year, according to property experts in a Reuters poll.

The findings highlight how the housing market, one of the biggest employers in a country of around 1.4 billion people, is likely to remain a stable contributor to growth in Asia's third-largest economy going forward.

Average house prices in India were expected to rise 5.0% over each of the next three years, lagging the current consumer price inflation rate, after increasing by 7% in 2022, according to the Nov. 9-Dec. 1 poll of 11 property market experts.

Forecasts for 2023 ranged widely from 1% to 13%.

But the outlook for India was relatively stable compared with key housing markets in developed economies, where prices are mostly predicted to slump after a pandemic-driven boom as central banks raise rates aggressively.

"The growth trajectory is definitely poised towards the upside, but expectations of rising interest rates, which may act as a momentary disruptor to demand, may see developers easing up on price increases in 2023," noted Rohan Sharma, senior director at JLL Research.

GRAPHIC: Reuters Poll: India housing market 

The Reserve Bank of India has also raised its repo rate, now at 5.90%, several times this year since May, by 190 basis points in total, with a few more hikes likely before a pause.

Relatively modest interest rate risk partly explains why all but one of 10 analysts who answered an additional question said the chances of a significant slowdown in the housing market over the coming year were low.

A regional breakdown of the latest Reuters poll data showed prices in Bengaluru, Mumbai, Delhi and Chennai were also forecast to rise by a median of 5%-6% over the coming three years, in line with the national average.

A steady increase in house prices - which have risen by nearly double over the past decade - has worsened affordability, dimming hopes of many aspiring first-time buyers of owning a house.

House prices would need to fall by a median of just 6.25% from peak to trough to make them affordable, according to the median response to an additional question, with the highest estimate at 17.5%.

Nine of 11 respondents said either an economic slowdown or rising rates would be the biggest challenge for first-time homebuyers.

"While India ... has been quite resilient amidst global disturbances, the chances of a slowdown in India cannot be ruled out," said Anuj Puri, chairman of ANAROCK Property Consultants.

"If jobs are impacted, the apportion towards real estate purchases could potentially decline."