ET NEWS

India has emerged among the world’s strongest housing markets, recording annual residential price growth of 7.7% in nominal terms and 4.2% in real terms in the first quarter of 2025. The country ranked 15th out of 55 markets tracked, ahead of the US, UK, and Australia.On a quarterly basis, Indian home prices rose 2.9%, underscoring sustained buyer confidence amid steady demand and a gradually improving borrowing environment, according to Knight Frank’s Global House Price Index.“India’s residential market continues to benefit from strong end-user demand, rising incomes, and renewed investor interest. The positive price momentum reflects the strength of our housing sector, even in the face of global economic uncertainty. As interest rates stabilize further, we expect demand to remain healthy, particularly in mid- and premium housing segments,” said Shishir Baijal, CMD, Knight Frank India.Globally, annual price growth across the 55 markets in Knight Frank’s basket rose to 2.3% in the first quarter of 2025 from 1.7% in Q4 2024, though still below the long-term average of 5.1%. The improvement reflects early signs of a turnaround in the housing cycle following policy rate cuts in several economies.Turkey, North Macedonia, and Portugal led global rankings with double-digit annual growth, while Mainland China and Hong Kong SAR saw the steepest declines, the report showed.“Global house-price growth has rebounded modestly above its long-run trend on the back of early rate cuts, but real affordability remains stretched. We believe further policy easing this year will be needed to sustain growth at or above trend,” said Liam Bailey, Knight Frank’s Global Head of Research.The report notes that 87% of markets recorded positive annual growth in the quarter, a sharp improvement from recent years when higher borrowing costs had cooled demand in several regions. However, affordability challenges persist in many major cities worldwide, limiting the scope for a broad-based recovery without further monetary easing.India’s rise in the global rankings reflects the continued resilience of its residential market, a trend that market observers expect to hold through 2025, with domestic demand and economic growth remaining strong.