In 2022, India’s real estate industry expects to sustain a continuous demand for affordable housing despite the increasing property and mortgage rates. The increasing affordable housing demand is in India’s top 7 primary cities and will reach 2.63 units in lakh in 2022, similar to before CoronaVirus hit India.
According to other experts, the real estate industry will finally bloom after a long decade and four continuous disruptions. Further, the Homebuyers body FPCE honours the RERA (Real Estate Regulatory Authority) under the Real Estate Act, 2016 for this progress. And by the financial year 2023, the real estate industry will see huge sales.
But when RBI increased the repo rates by a cumulative 140 points the interest rate increased for both old and new homebuyers and slowed down the sale in June 2022. But, now the demand for affordable housing is increasing rapidly again. Here let’s know what experts have to say.
What do Experts have to Say?
Anarock (Property Consultant) said that in the primary cities of India, the sale of Affordable housing will cross 2,61,358 units (in 2019) like the time before CoronaVirus but will quickly reach 3.43 units in lakhs like 2014. It will be the highest in the last decade.
Abhishek Lodha (Macrotech Developers MD and CEO) said the Indian Real estate industry is beginning a new structural upcycle and hoping for growth up to the next 10 to 20 years. He further mentioned that this would help in better wages, relevant homes for people (post CoronaVirus), supply and demand by developers, etc. Also, the increasing prices will help in improving and maintaining the economy & policy of the market.
He added that the affordable housing market is in a strong position and if supported well by policymakers, the Real estate industry will bloom and contribute to overcoming India’s economic inequality.
According to Abhishek Lodha, the old data displays a nil impact on housing demand by 8.5% to 9% interest rate on home loans.
see also – Real Estate Growth witnessed by Gurgaon in first half of the year
Pirojsha Godrej (Executive Chairman of Godrej Properties) noticed the change in terms of affordable housing interest rates (decreased by 6% – 7%) over the last two years with fixed property prices in the last 7-8 years.
He further stated that affordable housing is far better compared to the last 20 years, even with variable interest rates and increasing property prices. The real Estate industry is upscaling its place in the market even with a 10% to 12% interest rate and is booming.
He also believed that the Market is driven by how people perceive it based on how the Indian economy is performing and how their finances are going.
Abhay Upadhyay (president of the Forum For People’s Collective Efforts (FPCE) stated that he noticed that the demand for affordable housing over the last decade is converting into reality.
He added, “Consumer sentiments and confidence in the housing market have improved after the enactment of Real Estate Regulation Law (RERA). People strongly believe that they will get flats if projects are registered with RERA.”
Anuj Puri (Anarock Chairman) said the increase in repo rate increases some doubts about the dropping of affordable housing by 15% in June 2022 compared to Q1 of 2022.
He said, “The moderation in Q2 2022 can be momentary only and not a major dip in the housing sales. And, it is only because during Corona Virus time people desire their own home.” Further, the possibility of affordable housing sales can be impacted due to increasing mortgage rates.
Harsh Vardhan Patodia (CREDAI’s National Chairman) said that real estate developers are taking all the required steps to lower the rising interest impact on homeowners; however, during festive seasons, the sale will increase. Tata Housing and Macrotech Developers have announced schemes that will help bear some interest on the homebuyer’s behalf for a certain timeline.
Niranjan Hiranandani (National Vice Chairman, NAREDCO) said affordable housing for all is still a dream, and the real estate demand is temporary or yearly.
He stated that after the Corona Virus pandemic, the sentiment toward owning a home increased due to the need for stability and security. Further, he added, “The current spiralling home loan interest rate is unlikely to compress sustainable housing demand as the price band is still in the line of control.“
V Swaminathan (Executive Chairman of Andromeda loans and Apnapaisa.com) said the expansion in repo rate would increase the burden on new and old homebuyers. However, people who took the loan in April or before will be paying 6.5% – 7% at that time and will now be paying 8% – 8.5% as the interest rate. But, during festivals like Durga Pooja and Diwali, the real estate industry is expecting minimal effect on home loan rates.
But with demands on affordable housing gaining hype, all primary players have assorted a plan for targeted sales bookings for future development and the present financial year.
