Home loan being expensive has no effect on the sale of the house, there may be an increase in demand in the festive season
Home Loan Despite getting costlier and property prices rising, housing unit sales in the top seven cities of the country are expected to surpass pre-pandemic levels this year. Experts believe that the country’s residential market is going through a lot of structural changes in the last six years after four consecutive hurdles like demonetisation, formation of Real Estate Regulatory Authority (RERA), implementation of GST and COVID-19 pandemic. And now a long-term growth is beginning.
Demand will increase in the festive season
With the RBI increasing the policy repo rate by an overall 1.40 per cent this year and the banks shifting the burden on home loan borrowers, the pace of home sales has slowed. Apart from this, the high growth recorded in the prices of housing units in the last one year has also forced many people to postpone their home purchase plans. Prices rose an average of five per cent year-on-year in the June quarter due to higher cost of construction, especially cement and steel. But developers and brokers believe that the increase in cost is short-lived and the festive season will pick up demand once again.
Property advisory firm Anarock said that this year the sales of residential units in seven major cities of the country- Delhi-NCR, Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Hyderabad and Pune registered a pre-Covid level i.e. 2019. 2,61,358 units. However, sales will still be lower than the figure of 3.43 lakh units in 2014. Anarock Chairman Anuj Puri said the hike in repo rate had some impact on housing sales in the June quarter, which are down 15 per cent from the previous quarter.
Opportunities will increase in real estate
Abhishek Lodha, Managing Director and Chief Executive Officer (CEO) of Macrotech Developers said that India’s real estate is in the early stages of structural uplift. Keeping an optimistic view on the growth for the next 10-20 years, he said a modest increase in housing prices augurs well for the market. Lodha told PTI, “Historical data shows that there has been no impact on housing demand for housing loans up to 8.5-9 per cent interest rates. In the last two years, Godrej Properties Executive Chairman Pirojsha Godrej said. The market witnessed the best profitability in the U.S. as the interest rates were reduced from 6.5 to 7 percent.
Property prices during this period also remained more or less stable for the last seven-eight years. He said that despite hike in interest rates and increase in house prices, the economy level remains attractive. Abhay Upadhyay, president of FPCE, the apex homebuyers body, said the demand, which has been going on for more than a decade, is now turning into a real transaction. He said that the pace of housing sales could sustain provided builders live up to their promises of timely delivery of flats.
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