For years, India has been one of the worldÃ¢â¬â¢s top performing property markets. According to the Lloyds TSB International Global Housing Market Review, India has seen a 284 per cent real rise in prices since 2001, equivalent to an average annual rise of 14 per cent.
NDTV reports that Ã¢â¬Ëprices in most Indian urban centres have doubled since the property market boom began in 2006-07, driven by growing numbers of middle class Indians looking to invest in real estate as well as speculators.Ã¢â¬â¢
However, the growth in Indian property prices is set to slow in 2012, thanks to a slowing domestic economy and continuing global economic certainty. Keep reading to learn more about the property market in India.
Demand for homes in India is falling but prices continue to rise
Samantak Das, director of
research and advisory at consultant Knight Frank, said: Ã¢â¬ÅProspective home
buyers are being held back by a slowing domestic economy and great uncertainty
across the globe.
"Although in nominal terms house prices are expected to rise, once you adjust for inflation, which is more than 7 per cent, prices in real terms are stagnant. The economic situation in India and abroad is not giving enough confidence to homebuyers, who feel it is better to wait and watch."
Buying a property in India has become more difficult for locals over recent years thanks to rising prices and buyers required to pay around 25 per cent of the total cost of the house as a down payment. In addition, interest rates on home loans, which range from 10 to 14 per cent, will probably not fall any time soon either.
However, while demand for homes is falling, prices in India are still rising steadily. NDTV reports that Ã¢â¬Ëin Delhi and its surrounding National Capital Region (NCR) that includes Gurgaon and Noida, average house prices are expected to rise by at least 7 per cent this yearÃ¢â¬â¢ despite sales being down by one fifth.