RBI Survey: 60% Of Urban Households Feel Property Prices Will Go Up

The Reserve Bank of India (RBI) recently released its survey on the Inflation Expectations Survey of Households that studied people’s opinion on inflation between May 2019 and May 2020. Let us look at the key findings of the survey, which covered 18 cities of the country. 

Prices in general

In May 2020, 85.6 per cent of Indian households expected that prices would rise. In the same period last year, 78.3 per cent participants said that they expected prices to go up.

This year, 56 per cent participants also expect prices to increase more than the current rate, while 23.5 per cent say that it should be similar to the current rate. An estimated 12.4 per cent said that there would be no change in prices, while only 2.3 per cent said that there would be a decline in prices. 

Housing prices

About 59.7 per cent of participants expected housing prices to increase. Last year, 79.8 per cent participants said that they anticipated real estate prices to rise. This year, 36.9 per cent say that prices of housing will increase at more than the current rate, while close to 17.3 per cent say prices will increase at the current rate.

An optimistic 25.1 per cent of participants think that there will be no change in housing prices and another 15.2 per cent say that they expected prices to reduce.

Household durables

As against 61.3 per cent participants who felt that prices would increase owing to inflation last year, 55.1 per cent expect the same this year. Of this, 33.6 per cent participants felt that prices would increase by more than the current rate. Another 16.4 per cent felt that the rise could be at the same or similar rate.

The survey suggests that 5.1 per cent felt prices could increase but at a lower rate than the prevailing one, while an optimistic 29.7 per cent felt there would be no change in prices. Another 15.2 per cent said they expected prices to decline.

On the whole, the majority expect prices to rise.

Note: Financial sector employees, self-employed, homemakers, retired persons, daily workers and other employees took part in the survey. About 5,761 urban households participated in the survey.