| | APRIL 202419After all, buying a home is still considered the pinnacle of financial independence and social `arrival' in India.What the Data Tells UsSales have skyrocketed, and pent-up inventory has been decreasing steadily. According to real estate consultants Anarock, the robust housing sales momentum in Q1 2023 brought down residential inventory in the 7 large metros to just 20 months, from 42 months by Q1 2018-end - the lowest overhang in five years. In this quarter, around 1,13,770 homes were sold in these cities, an increase of 14 percent over Q1 2022.The demand is highest for bigger homes, with sales of 2, 3 and 4 BHK homes outstripping that of affordable smaller homes. Bigger homes can multi-task most efficiently when managing domestic and work life and are also in the highest demand on the resale market.International real estate consultancy CBRE's `India Market Monitor Q1 2023' shows extraordinary growth in the sales of luxury homes in Q1 2023 - a massive 150 percent year-on-year growth in these top seven cities. As many as 4,000 luxury homes were sold this quarter, as opposed to 1,600 in the same period the year before.Supply follows demand. According to a survey by real estate data analytics firm PropEquity, the number of homes sold in Tier-I cities in India in Q1 2023 considerably outstripped the number of units launched in this period. In these, 93,600 residential units were launched during the January to March 2023 quarter compared to 123,938 sold units.By all yardsticks, the Indian housing market is on an unprecedented roll and shows no signs of slowing down anytime soon. Neither increasing home loan interest rates nor rising prices have slowed down demand, ensuring that it is sustainable and on a constant upward trajectory.The Housing Investor ReturnsDue to the consistently high end-user demand, investors have also gotten back into the fray. After several years, housing prices have begun increasing again - by as much as 7 percent in Q1 2023 alone, according to a report by PropTiger.com. Residential real estate is now the top-performing asset class, and housing prices do not fluctuate madly like stocks and precious metals.Buy Now or Wait and Watch?After the RBI hiked the repo rate several times and then maintained it at 6.50 percent, home loan interest rates also increased. However, there are chances that the RBI will now bring down the repo rate in the coming monetary policies.Should hopeful homebuyers wait for this to happen? Should end-users approach a home purchase with such a mindset?While interest rates may come down in the future, property prices will rise. The increased value of the acquired property will compensate for a marginal percentage hike - as already seen, property prices are rising quickly now.Also, most Indians don't want to buy just any house. In most cases, they have already shortlisted the most desirable options. They may even have identified their no.1 preference, at least for the most desirable project, if not the exact unit.Considering the current sales velocity, these properties may no longer be on the market when the RBI announces lower repo rates and banks recalibrate their home loan lending rates. Waiting for too long can involve what is known as a high `opportunity cost' - the loss of potential gain from one alternative (buying now) when another alternative (buying later) is chosen.There are other factors to consider while deciding on buying a home now:1. Whether buying a home big enough to accommodate future requirements such as added family members, a home office, and generally enough buffer space to not be crowded.2. There is little point in buying smaller, costlier homes in central locations if the buyer can work remotely and live more spaciously in a cheaper suburb well-connected to the workplace by public transport.3. The project should have enough lifestyle amenities, especially health-boosting features like a jogging track, swimming pool, tennis court, and gym. The pandemic has highlighted the need for greater health focus and the importance of good security and green open spaces.Some of the top integrated township properties are now the top option for those who want a better quality of life, adequate connectivity to work, and superior capital appreciation on their investment. Don't just buy four walls - invest in a future-proofed lifestyle.Final ThoughtsWe are at an inflection point in the annals of Indian housing market history. Covid-19 kick-started it, but the gained momentum was independent of the pandemic. Across the country and beyond, Indians are firmly on the homebuying bandwagon.While these are exciting times when an unprecedented number of homeownership dreams are finally being realized, they are also troubled regarding the global economic outlook and its undoubted impact on India's consumption story.Depending on in which industry they are employed and at which level, homebuyers must judge their situation carefully before pressing the commit button on a home loan. But, as we can see by the unrelenting sales numbers, securing an owned home remains most Indians' top priority. | | APRIL 202419
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