India's Residential Property Boom Nears Its End

Increased Housing Supply and Rising Borrowing Costs Take a Toll

According to Keki Mistry, Vice Chairman of Housing Development Finance Corp, a combination of factors is set to bring India's five-year property boom to a close. Executives at leading mortgage lenders concur, predicting a significant downturn in the country's residential property market.

Predicted Price Drop

• Up to 15% Price Decline: Industry experts anticipate that property prices across India could plummet as much as 15% in the coming months.
• Potential 20% Drop: Gagan Banga, Chief Executive of Indiabulls Financial Services Ltd., takes a more cautious stance, forecasting a possible 20% decline in property prices.

Key Factors Contributing to the Decline

• Rising Housing Supply: An increase in the availability of housing units is set to impact property prices.
• Escalating Borrowing Costs: Higher interest rates are making mortgages more expensive, further dampening demand.
• Stock Market Rout: The overall economic uncertainty due to the stock market downturn is also influencing the real estate sector.