Updated December 18th, 2023 at 14:59 IST
India jumps 18 spots to secure 14th global rank in annual home price movement
Amid rising global interest rates, house prices show resilience with a 3.5% annual growth, nearing the pre-pandemic average of 3.7% in a survey of 56 countries.
India has surged 18 positions to reach the 14th spot in the annual home price movement, as per a report from Knight Frank. The data, covering the quarter ending September 2023, underscores a substantial 5.9 per cent year-on-year (YoY) rise in real estate prices.
This ascent in global rankings comes amidst a broader analysis of 56 countries, revealing the resilience of house prices worldwide. Despite the backdrop of rising interest rates employed by central banks to counter global inflation, the average annual price growth stands at 3.5 per cent, closely approaching the pre-pandemic ten-year average of 3.7 per cent.
Global rankings and key trends
Turkey continues to hold the top position in the Knight Frank Global House Price Index, maintaining its lead since Q1 2020 with an 89.2 per cent annual increase and an 18.1 per cent quarterly surge.
The top five spots are largely dominated by southeastern European countries, with Greece, Croatia, and North Macedonia reporting robust annual growth.
Robust Indian resilience
India's rise to the 14th spot places it prominently in the Asia-Pacific region, following Japan. The report attributes India's resilient performance to stable economic conditions, providing a sense of financial security for end-users. Despite challenges such as increased home loan rates and inflation threats, the Indian residential market has demonstrated stability.
The proactive measures taken by central and state governments at the onset of the pandemic, offering incentives to homebuyers and stimulating market activity, have played an important role in the surge, leading to an uptick in sales.
Shishir Baijal, Chairperson & MD, Knight Frank India, commented, "The robust domestic economic fundamentals and escalating aspirational attributes of residential real estate are driving heightened demand amongst homebuyers in prominent residential markets within the country."
Global housing resilience
Liam Bailey, Global Head of Research, Knight Frank, highlighted the surprising resilience of global house prices amid rising mortgage costs. Factors such as strong savings, above-inflation pay settlements, and a low supply of housing stock contribute to market stability.
However, Bailey pointed out a potential challenge for housing markets in 2024 - low market liquidity. Sales volumes are expected to decline by up to a quarter compared to recent peaks, and Bailey suggests that only a shift to lower interest rates could rejuvenate sales activity.
Published December 15th, 2023 at 16:13 IST