Despite inflation and hiked interest rates, demand for real estate properties to grow this festive season

• As per an Anarock report, as many as 2.73 lakh units have already been sold in 2022 between January and September.
  
• “Inflation and interest rate hike couldn’t dent the buoyant homeownership sentiment across the nation,” said Rahul Purohit of Square Yards.
  
• Mumbai Metropolitan Region (MMR), Bengaluru, Pune, Hyderabad and NCR have remained the most active residential markets in 2022 so far, both in terms of new launches and housing sales.
  

The real estate sector is banking on the demand momentum it has seen in the last nine months to continue despite higher interest rates and biting inflation.The demand for residential property has seen a gradual recovery after successive lockdowns during the pandemic, with buyers looking for bigger homes. Non resident Indians too have been active since the pandemic started. Hopes are pegged on demand sustaining even during the festive season.

“With real estate prices pegged to inch up in the coming months due to increase in input costs, the demand for properties have accelerated in the months prior to the festive season as homebuyers want to cash in on the opportunity now. With better-than-expected monsoon sales this year, a bumper festive season and record sales is on the cards,” Rahul Purohit, national sales head, Square Yards told Business Insider India.

As per an Anarock report, as many as 2.73 lakh units have already been sold in 2022 from January till September. This is a whopping 87% increase as against the corresponding period in 2021.

“Inflation and interest rate hike couldn’t dent the buoyant homeownership sentiment across the nation as people are more confident today about real estate investment than earlier,” Purohit added.

With work-from-home culture still prevalent, customers are preferring spacious homes in 2BHK and 3BHK configurations as they want more space for recreational purposes.

Homebuyers are scouting for ready-to-move-in properties in the mid and premium segment in gated communities that come with huge open spaces, health and wellness amenities and open floor plans.

“This demand for housing properties is further expected to breach the pre-Covid levels during this festive season,” Purohit said.

Rising income and employment levels, increase in spending power, need for financial and emotional security, the penchant for bigger homes with upgraded amenities and the auspicious reason of buying a home during the festive season, have led to a surge in demand for properties this year.

Festive quarter is also said to be the best performing season in the real estate sector. “If we consider trends from 2018 onwards, we can broadly say that the festive quarter (Oct-Dec) has been the best-performing quarter in respective years except in 2019,” said Anuj Puri, chairman at Anarock Group.

Banks too have been launching festive offers like As a part of its festive bonanza, SBI is offering concessions of up to 0.25% on home loans, 0.15% on top-up loans, and 0.3% on loan against property. It has further sweetened the deal by waiving off the processing fees on home loans upto Jan 31, 2023.

Demand for mid- and premium-segment houses to remain strong

According to Puri, the mid- and premium-segment homes priced between ₹40 lakh to ₹1.5 crore will continue to be active in the upcoming quarters.

“There is genuine housing demand in the market and the end-users are driving this demand,” Puri said.

Premium and luxury segments are also doing better than pre-Covid times due to increase in standard of living among homebuyers and the need for bigger homes.

Mumbai Metropolitan Region (MMR), Bengaluru, Pune, Hyderabad and NCR have remained the most active residential markets in 2022 so far, both in terms of new launches and housing sales.

In terms of new launches, there has been a 63% increase in the first nine months of 2022 against the same period last year, as per the Anarock report. Last year, in the first 9 months, as many as 1.63 lakh units were launched, while this year 2.65 lakh units were launched across the top 7 cities. This clearly shows the strong momentum in the housing sector.

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