India falls by 12 spots in Global House Price Index, witnesses negative growth

The Global House Price Index, maintained by the real estate agency Knight Frank, tracks the movement of residential prices in 56 countries and territories across the world

India has fallen by 12 spots to attain the 55th rank in the Knight Frank’s Global House Price Index during the first quarter of 2021. During the corresponding quarter in the previous year, India was ranked 43rd in the index. The fall in the country’s rank translates to a roughly 1.6% year-over-year(YoY) drop in home prices.

The Global House Price Index, maintained by the real estate agency Knight Frank, tracks the movement of residential prices in 56 countries and territories across the world by referring to official statistics. This year till March 2021, the index increased by 7.3%. The London based Knight Frank recorded that the rate of increase in housing prices globally is the fastest since the fourth quarter of 2006.

However, several large economies of the world witnessed a slowdown in housing prices with India and Spain recording negative growth of -1.6% and -1.8% respectively as compared to the first quarter of the previous year. Lockdowns due to COVID-19, economic uncertainty and excess supply are being blamed as the reasons for the fall in prices.

India’s rank in the index fell from 43rd in Q1 of 2020 to 55th in the corresponding quarter this year. However, this is an increase from the previous quarter(Q4 2020) when India was ranked at 56.

According to Shishir Baijal, Chairman and Managing Director at Knight Frank India, the prices in Q1 2021 remained stable due to a recovery in sales volumes. “With the onset of the second wave and the threat of new variants of the virus along with the fluctuation in vaccine roll out there could be a pressure on sales volumes as well as on price growth,” he warned.

Among other countries, Turkey witnessed the highest increase in home prices in the index for the fifth time in a row. However, this is largely attributed to the increasing rate of inflation in the country.

Meanwhile, prices increased by the fastest rate in the United States since 2005, growing by 13.2% YoY.

 

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