Home and Rent Prices Set to Rise Sharply
Buying or renting a home is about to get more expensive, as property prices and rental rates are expected to rise significantly. A recent survey by Reuters, conducted between February 17 and March 4, shows that home prices will increase faster than inflation, making it harder for first-time buyers and tenants.
Big Price Increases Ahead
Experts predict that home prices will rise by 6.5% in 2025 and another 6.0% in 2026. This is a big jump from the 4% increase in 2024, showing a strong real estate market despite economic challenges.
Why Are Prices Rising?
One major reason is the gap between supply and demand. In the last 10 years, high-end property prices have nearly doubled, while affordable housing remains out of reach for many middle- and lower-income buyers.
Other factors include low wage growth, slow economic progress, and a lack of well-paying jobs, which make it difficult for people to afford homes. As a result, more people are choosing to rent instead of buying.
Rentals Set to Soar
Rental rates in big cities are expected to rise by 7.0% to 10.0% in the next year, much higher than the inflation rates of 4.3% in 2025 and 4.4% in 2026. This will put extra financial pressure on urban residents, especially in metro areas where housing demand is high.
What Will Happen Next?
The future of the real estate market will depend on economic conditions, interest rates, and government housing policies. The Reserve Bank of India may cut interest rates, offering some relief to buyers. However, with strong demand and limited supply, prices are still expected to go up.
