According to Reuters Poll India has led the list of top-performing housing markets globally with a 284% real rise in prices since 2001. Price of houses in India, which have more than doubled in the past five years, will keep rising this year even as the economy slows although prices in the country's financial capital, Mumbai, look ripe for a fall, showed the Reuters poll.
The first such survey of 19 property market analysts, consultants, developers and data firms taken over the past few weeks pointed to a median 7.5% rise for house prices this year in Asia's third largest economy.
Yet the expectation for price rises in cities such as Mumbai coincides with some of the strongest conclusions ever in Reuters housing market polls worldwide that a property market is overvalued.
"There is no demand, there are no fundamentals to these prices," said Pankaj Kapoor, founder and managing director at Liases Foras, a real estate research firm in Mumbai.
Sales in Mumbai have continuously been going down, the largest housing market in India. It has 37 to 40 months of inventory lying in the market. No efficient market can maintain more than eight months of inventory. But there appears to be little hope for prospective homebuyers in a market which is too expensive in the urban centres of Delhi and Mumbai but that is still being driven by widespread expectations for hefty capital gains.
Developers, who had reaped profits off a booming housing markets in India, say relatively high borrowing costs and an average 30% rise in the cost of cement, steel and labour over the last few years, stops them from lowering prices.
The first such survey of 19 property market analysts, consultants, developers and data firms taken over the past few weeks pointed to a median 7.5% rise for house prices this year in Asia's third largest economy.
Yet the expectation for price rises in cities such as Mumbai coincides with some of the strongest conclusions ever in Reuters housing market polls worldwide that a property market is overvalued.
"There is no demand, there are no fundamentals to these prices," said Pankaj Kapoor, founder and managing director at Liases Foras, a real estate research firm in Mumbai.
Sales in Mumbai have continuously been going down, the largest housing market in India. It has 37 to 40 months of inventory lying in the market. No efficient market can maintain more than eight months of inventory. But there appears to be little hope for prospective homebuyers in a market which is too expensive in the urban centres of Delhi and Mumbai but that is still being driven by widespread expectations for hefty capital gains.
Developers, who had reaped profits off a booming housing markets in India, say relatively high borrowing costs and an average 30% rise in the cost of cement, steel and labour over the last few years, stops them from lowering prices.
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