Will property prices move up? Home buyers are divided in their opinion: ecis2016.org News poll

[ecis2016.org] As central banks across the world, the RBI included, start increasing interest rates, housing values are expected to follow suit. However, home buyers in India are not that sure about that, shows a poll by ecis2016.org News

Even though there is a near-unanimous opinion among various sector stakeholders that housing prices will only move upwards in 2022, home buyers are split in their outlook towards value appreciation, shows an online poll conducted by ecis2016.org News.

You are reading: Will property prices move up? Home buyers are divided in their opinion: ecis2016.org News poll

A little over 46% of the respondents are of the opinion that property values will increase, results of the two-week-long poll, conducted by the online real estate company between June 20 and July 5, 2022, show. On the other hand, 42% of the participants feel that prices will decline in 2022 while another 20% voters think it will remain stagnant.

The anomaly in numbers is due to the fact that respondents were offered the choice to select more than one option as their voting choice. A total of 6,907 respondents participated in the poll, casting 7,565 votes.

Some may view the votes towards lower or stagnant prices as wishful thinking on part of home buyers and data coming from various sources would validate their point.

Amid geopolitical tensions leading to sustained inflationary pressure, central banks across the globe, the Reserve Bank of India (RBI) included, are busy hiking benchmark lending rates. Consequently, the RBI’s benchmark repo rate has been increased twice over a period of one month by 90 basis points – a move that has triggered interest rate hikes among India’s commercial banks. So, from sub-7% interest when the repo rate was stagnant at 4%, leading banks in India have started to charge over 8% interest on home loans from mid-June 2022, after the banking regulator brought the benchmark lending rate to 4.90%.

Read also : Union Budget 2022: Are there any long-term benefits for home buyers and developers?

Also read our full coverage on recent repo rate changes by the RBI. 

The upwards tweaking of lending rates would increase the overall cost of property acquisition for India’s burgeoning middle class, as most home purchases in this segment are completed with the help of housing finance. It would also invariably force developers to pass on the burden of more expensive credit to home buyers.

“Due to geopolitical conflict, the input costs were already high and now with this rate hike (of 50 basis points on June 8, 2022), it will only dampen the spirit of the entire real estate value chain. Cost of borrowing for both, developers and buyers, will be impacted and this will result in undesired rate hikes across the spectrum,” said Bhushan Nemlekar, director, Sumit Woods Limited.

[ecis2016.org] Is cost escalation forcing builders to compromise on quality?

Prices inching upwards already

As it is, average values of properties are moving upwards, a recent report by real estate firm PropTiger.com showed. Data available with the company show that the average values of new and available properties in India’s leading housing markets appreciated in the range of 5% to 9% in the past one year.

*Weighted average prices as per new supply and inventory

Read also : 19 housing societies in Mumbai’s Vasai get notices for denying membership rights to non-Catholics

Source: Real Insight Residential – April-June 2022, PropTiger Research

Read more about unsold real estate inventory in India in PropTiger’s Real Insight report

Even though the data may clearly indicate towards price appreciation, the ecis2016.org News poll gives an insight into the home buyer’s mindset. A positive buyer sentiment is largely being attributed to spearheading a demand revival in India’s housing market in the aftermath of the Coronavirus pandemic. As housing affordability in the country reached its peak, buyers continued to side with residential real estate despite a bleak job market scenario. Any dent in the affordability factor may be detrimental to this highly cherished and much desired buyer sentiment, resulting in adverse impact for the country’s second-largest employment-generating sector.

The naysayers may think differently, but some in the industry are of the view that the robust demand for residential real estate will continue to grow, the price increase notwithstanding.

“We believe that preference for owning a home and strong wage growth will continue to support the housing market,” Shraddha Kedia-Agarwal, director, Transcon Developers, said after the RBI announced the repo rate hike on June 8, 2022.

Source: https://ecis2016.org/.
Copyright belongs to: ecis2016.org

Source: https://ecis2016.org
Category: Lifestyle