Housing prices likely to rise 3-4% in FY26 on high base effect, better supply: Ind-Ra
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India Ratings and Research (Ind-Ra) has said that housing prices may rise 3-4 per cent next fiscal (FY26) on high base effect and better supply. It expects property prices to increase 5-6 per cent year-on-year (YoY) in FY25. It stated prices surged 21 per cent YoY in FY24 with old stock cleared and existing inventory largely liquidated.
It has maintained a neutral outlook for the residential real estate sector for the next fiscal. It said ‘Growth in bookings is likely to reduce significantly due to the high base, high prices and a likely slowdown in the luxury segment.’ Besides, it said the residential real estate market is expected to register a strong performance in FY25, where the sales growth will be around 17 per cent YoY in terms of area sold (square feet of area sold) and around 15 per cent in terms of units sold for the top eight real estate clusters. This growth will be largely driven by the premium and luxury segment sales.
Mahaveer Shankarlal Jain, Director, Corporate Ratings, Ind-Ra, said ‘FY26 is likely to see continued positive growth in bookings, although at a slower pace due to the base effect and moderation in affordability. Among the top eight cities, the National Capital Region, Bengaluru, and the Mumbai Metropolitan Region are likely to remain relatively resilient in bookings, except for the luxury segment.’ He added developers might continue to experience positive growth in collections and operating cash flows, leading to a sustained strong balance sheet.
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