Attention, Homebuyers! Property Prices, Rents Set To Surge Over Next 2 Years: Report
Homebuyers and renters will face significant price hikes as property values and rental rates are projected to rise sharply.
Homebuyers and renters may need to brace for significant price hikes as property values and rental rates are projected to rise sharply in the coming years. According to a recent Reuters poll conducted between February 17 and March 4, property prices are expected to climb at a rate exceeding inflation, signaling a challenging market for first-time buyers and tenants alike. The survey, which gathered insights from 14 real estate market experts, forecasts that the average housing price in the country will surge by 6.5% in 2025, followed by an additional 6.0% rise in 2026. This marks a notable acceleration from the 4% increase observed last year, reflecting a market gaining momentum despite broader economic uncertainties.
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One of the key drivers behind the rising property values is the disparity between supply and demand. While the high-income segment has witnessed property prices nearly double over the past decade, the affordability crisis for middle- and lower-income buyers continues to intensify. Stagnant wages, slow economic growth, and a lack of high-paying jobs have further constrained purchasing power, pushing more individuals into the rental market.
The survey also indicates a divide among experts on whether homeownership will become increasingly difficult for first-time buyers. Some believe that despite higher costs, falling interest rates might provide some relief, while others warn that the widening affordability gap will make it harder for new buyers to enter the market.
Rentals to Outpace Inflation
Alongside rising property prices, the cost of renting in major cities is set to skyrocket. Experts predict rental rates will jump between 7.0% and 10.0% over the next year – far outpacing projected consumer inflation rates of 4.3% in 2025 and 4.4% in 2026. This surge is expected to put additional strain on urban dwellers, particularly in metro areas where rental demand remains high due to constrained housing supply.
The property market outlook remains closely tied to economic conditions, interest rate trends, and government housing policies. While the Reserve Bank of India’s expected rate cuts could provide some relief, high demand and limited housing supply are likely to sustain upward pressure on prices.
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