The prices have remained muted in last three years with modest growth of 4 per cent due to demand slowdown and huge delays in project completion, the report said, but expected the market to revive in few quarters.
India’s real estate and construction sector in expected to become the third-largest globally by 2030, doubling its share to over 15 per cent in the GDP, the report ‘Residential Real Estate: An Investible Asset’ projected.
“Indian property prices have more than doubled since 2007 (without adjusting for inflation) — the second best globally,” it said.
There was some price correction in 2013 and 2014 followed by a moderate appreciation in housing prices.
Over the last decade, affordability to own properties have reduced by 50 per cent as the income growth has lagged property price growth. However, India’s property market is relatively affordable as compared to that of its global counterparts.
Overall, residential property holds strong potential as fundamentals like GDP, urbanisation, income growth, savings rate, mortgage growth and affordability are positive.
The report also said that the residential real estate market, which is facing a major slowdown especially after notes ban, is expected to pick up in the next couple of quarters as the new real estate law and GST are likely to disrupt the market in the short-term.
The realty market has generated strong return on investments to home buyers in the long-term and is expected to continue to perform well on the back of positives like cut in interest rates, interest subsidy, increased mortgage penetration and ease of FDI norms in the sector.
The urban population of India is anticipated to grow by nearly 36 per cent to over 580 million by 2030. This, along with GDP growth, job creation and mortgage growth is expected to lead to a substantial increase in demand for housing in India.