India's property prices are expected to rise 7.5% on a pan-India basis this year, the fastest growth in five years. Average house prices were predicted to grow 6% next year and in 2024. In May11-27, a poll of 13 property analysts was held. In a March poll, the analysts predicted growth of 5.0% for this year. The Bombay Stock Exchange (BSE) index of real estate firms is up 21% in the past year, outperforming the 15% incline in the broader Sensex. According to the Reuters poll, prices in Mumbai and Delhi, including its surrounding National Capital Region, are anticipated to grow between 4% and 5% this year and next. Prices in Bengaluru and Chennai are predicted to increase 5.5%-6.5% over the next two years. Improving housing demand and increase in building material prices are some of the major factors for housing costs to rise. However, analysts cautioned that higher interest rates could weigh on affordability, specifically for first-time buyers. Earlier, this month, the Reserve Bank of India (RBI) raised the benchmark repo rate - the rate at which it lends to banks - by 40 basis points to 4.40% in its first rate hike in about four years. Economists predict the central bank to frontload more aggressive interest rate growth in its effort to tame high inflation. The Indian housing sector has broadly benefited from the low-interest rates in the last two years. This policy rate hike will lead to higher EMIs for home loans. However, it is believed that improved homebuyer attitude, preference for owning a house, and strong wage increases will continue to help the housing market. The monetary policy stance is still helpful, and with the receding pandemic and economic growth, said Gulam Zia, Senior Executive Director- Knight Frank India. If interest rates go up rather sharply, analysts alert that many would-be first-time homeowners would choose to rent instead. Image Source Also read: 2BHK houses witnesses 42% demand share from homebuyers