The demand for real estate as an alternative investment never goes down. So is the ever-increasing demand set to arrive at its full peak during this season of festivals across India. As winter is approaching, a lot of festivities and an early increase in the demand for residential real estate are being observed in the country’s major economic hubs. The key factor is that this rise is accompanied by a previous increase in demand for office space in commercial real estate.
Since the beginning of the year, analysts have said that it is going to be a good time in the upcoming months as the restrictions for the pandemic are being fully lifted in most countries around the world. Similarly, India is also one of the important countries of countless dreams, where most of the restrictions have already been lifted and people can finally look for some impressive pieces of commercial real estate. The major cities of the country like New Delhi, Mumbai, Pune, Hyderabad, Bangalore, etc. are also witnessing the same.
Let’s analyze this further!
The rising demand for residential real estate properties
The overall trend in residential properties has consistently climbed throughout the year, as house sales have witnessed increasing demand due to cheap home loan rates and decreased inventory in major cities. According to Anarock data, the inventory backlog has reduced from 48 months from Quarter 2 2021 to 22 months in Quarter 2 2022. This is because many preferred to purchase their residences during the epidemic. Reduced mortgage rates supported a large portion of this demand.
Three indicators indicate that this trend will certainly persist, contributing to a healthy festive period for real estate. Firstly, rates have been gradually rising due to rising input costs. This adds to increasing demand since purchasers want to purchase in a rising-priced market. Secondly, a 140 basis point increase in house loan interest rates at 7.9 percent hasn’t dampened demand because rates are mostly lower than pre-pandemic levels.
This is because, despite the global crisis, which has increased mortgage rates, the Indian market continues to develop at a pace of 7%, as per Dhaval Ajmera, head of Ajmera Realty. Furthermore, as individuals work remotely more frequently, there is a greater need for larger households with enhanced facilities.
Given this context, the holiday season is projected to see strong demand for residential accommodation. Because of the monsoon and the shradh season, the preceding quarter (July-September) is considered a bad sales time, and sales are frequently concentrated in the October-December qtr.
“Several projects are currently being developed by listed and big developers, drawing a huge number of purchasers and investors.” Today’s purchasers are biassed in favor of recognized players, who are reporting high sales in their projects, says Anuj Puri, head of Anarock Property Consultants.
“Additionally, there are enough ready-to-move-in current assets in the industry for discriminating purchasers, which may drive sales even higher during the opportune festive season [given that ready houses are in high demand].” According to Anarock Research, there have already been more than 1.21 lakh available apartments for sale throughout the top seven cities, “he says.
Is it a great opportunity to invest in residential real estate assets?
Yes, it is a good opportunity for investors to put their money into assets like residential and commercial real estate. Making alternative investments in real estate can be very beneficial for everyone as the demand for residential as well as commercial space has increased several times. Moreover, many concepts of investing are simpler than before, which makes real estate investments as easy as buying groceries. It’s surprising, isn’t it?
Do not miss Mumbai, Bengaluru, and Hyderabad: Cities leading India’s residential real estate recovery in 2022.
Previously, the concept of fractional ownership was not present, which made investing harder as, for most of the new investors, capital challenges were frequently prevalent. With the help of fractional ownership, a person can invest in residential or commercial real estate at ease by just purchasing a small fragment of the asset and still being the legal owner of that particular asset. This has taken the financial world by storm.
It adds to the convenience of making a diverse portfolio of real estate investments. This is a good way of making profits from various assets in your diversified portfolio. Most countries with a strong real estate industry already have the provision for new as well as old investors to make alternative investments through fractional ownership.
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