Will property prices crash in India due to the Coronavirus outbreak

Interestingly, no prime market showed any downwards movement in prices during the October-December period of 2020, in spite of the severe pressure caused on growth, because of the pandemic

File photo
File photo

Even though the stress caused by the Coronavirus pandemic has impacted India’s key residential markets, the average rates of new projects continue to stick to their previous levels, data available with PropTiger.com show. According to a report by the property brokerage firm, the weighted average prices of properties, in leading markets like NCR and Mumbai showed flat growth in the October-December period of 2020, when compared to the levels seen in the same period in 2019

Price growth in Q4 2020: City-wise break-up

City

Average price as on December 31, 2020 (in Rs per sq ft)

Annual growth in %

Ahmedabad

3,213

7

Bangalore

5,342

2

Chennai

5,228

2

Hyderabad

5,602

5

Kolkata

4,202

2

MMR

9,448

No change

NCR

4,268

No change

Pune

5,077

4

National average

6,042

No change

 Source: Real Insight: Residential Annual Roundup 2020

Interestingly, no prime market showed any downward movement in prices during the one-year period, in spite of the severe pressure caused on growth, because of the pandemic. In what could be termed as significant at this point of time, the average rate of new housing projects in Ahmedabad and Hyderabad, in fact, registered positive growth of 7% and 5%, respectively. Pune, too, recorded a positive price growth of 4% in the past one-year period

In the coming quarters too, price growth is expected to remain range-bound amid global agencies predicting a long-drawn recovery process for India’s economy. “A combination of supply-side scarring and demand-side constraints – such as the weak state of the financial sector – will keep the level of GDP well below its pre-pandemic path,” Fitch Rating said in a statement, on January 14, 2021

Terming India’s Coronavirus-induced recession as among the most severe globally, the rating agency said it expected the country’s gross domestic product (GDP) to expand by 11% in FY22 (April 2021 to March 2022) after falling by 9.4% in FY21 (April 2020 to March 2021)

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