Which housing markets are the worst in India?
India’s housing market is currently undergoing a housing bubble fuelled by oversupply and a lack of demand, according to a new report from a leading credit rating agency.
In a report titled Housing bubble: The crash is here, and it’s worse than we thought, the Moody’s Investors Service said.
The report is based on data from banks, brokers, insurers, investors and private real estate developers.
Moody’s says that while India’s total housing market may be growing, it is experiencing a massive and accelerating housing bubble.
It says that the number of properties listed on the market has grown from less than 1,000 in 2011 to nearly 1,500 in 2019, with the total number of homes under contract rising to 3.5 million.
The number of people moving into housing rose from 12.5 lakh in 2011, to 22.6 lakh in 2019.
The share of people living in homes has also increased, from 15.7% in 2011-11 to 17.3% in 2019-20.
The rate of increase is far higher than other countries, which have experienced significant declines in the housing market.
Despite this, the housing bubble is still far from being over, the report said, pointing out that it could only last for five years.
As a result, the country is still at risk of another housing bubble, Moody’s said, adding that this is “likely to continue for some time”.
While the housing boom has been driven by the high-end real estate market, it also fuelled the subprime mortgage market.
The subprime market is particularly prevalent in urban areas, where people can access cheaper loans.
While there are no official figures on the number or size of subprime loans in India, analysts say that it is likely to be more than 10% of the country’s total loans.
India’s subprime lending market is estimated to be worth nearly $200 billion, and is projected to reach $1 trillion by 2021.
India has been one of the world’s fastest-growing economies, and has become the fastest-developing country in Asia.
However, the current housing bubble could push it even further, the credit rating service added.
Over the past year, the Indian government has stepped up measures to stem the housing downturn, including by providing incentives to developers to build homes.
However many of these projects are still in the planning stages.