India’s major cities are witnessing a surge in the housing market in 2024. Sales have risen by 20% in the first quarter from January 1 to March 15, with nearly 147,000 units sold across Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, and Pune, according to a report by NoBroker, a property search portal.
Factors Driving the Market
This positive trend can be attributed to several factors. The Indian economy is experiencing robust growth, and stable economic policies from the government are instilling confidence among buyers in the real estate sector. Despite continuous increases in property prices, people feel secure about investing in property, buoyed by the stability it offers.
Growing Desire for Homeownership
There is a noticeable trend towards homeownership, driven by the sense of security and stability that owning a property provides. Additionally, the availability of relatively affordable home loan interest rates, currently ranging between 8.30% and 11.15% per annum, is further fueling the housing market.
Amit Agarwal, CEO & Co-founder of NoBroker.com, stated, “The average rent increase has outpaced average salary increments across cities, prompting potential home buyers to make the leap. While rents may stabilize with more gradual supply coming in, they are unlikely to decrease.”
Preference Shifts in Buyer Pool
Interestingly, there is a shift in preferences within the buyer pool. Urban buyers who previously considered properties priced between ₹80 lakh and ₹1 crore are now eyeing more expensive options exceeding the ₹1 crore mark. This indicates a preference for larger living spaces and the security offered by gated communities.
Conversely, buyers initially targeting homes in the ₹60-80 lakh range are finding themselves priced out. They are now opting for more affordable options in distant locations with fewer amenities. This disparity in impact on different income groups highlights the challenges faced by some buyers amidst rising prices.
High Demand for New Projects
New projects are witnessing strong demand, often selling out on launch day. This surge in demand is driving up prices, particularly for near-completion properties, as buyers rush to finalize purchases before prices escalate further. Notably, the gap between established developers (Grade A) and newer companies (Grade B) is diminishing, indicating a more competitive market.
Outlook and Potential Relief
The recent easing of inflation in India may improve affordability for buyers, facilitating easier access to loans and greater participation in the market. This easing inflation could offer some respite for individuals looking to enter the Indian housing market.
