For all the talk of an economic slowdown and sluggishness in consumer spending, housing prices continue to rise. Barring Kolkata, home prices have continued to rise in most big Indian cities in the past seven quarters. Prices have increased although absorption of residential property declined by 16% in the first half of the year to March from the preceding fiscal and absorption of commercial real estate by 29% in the same period, according to Citigroup Inc. “This is attributed to the slowdown in economy, rising interest rates and affordability issues,” Citigroup economists said in their latest macro survey. The net result is likely to be an inventory build-up, which could potentially lead to a further construction slowdown or a rise in bad loans for banks.
Housing prices continue to rise
Barring Kolkata, home prices have continued to rise in most big Indian cities in the past seven quarters
Photo: Ramesh Pathania/Mint