… But if you haven’t done so yet, then finalise the deal before rates go up any further!
For some time now, experts have been talking about the rising demand for homes, skyrocketing prices of construction materials and supply chain disruptions in view of geopolitical conflicts. All these have a direct bearing on property prices, and so far, developers have tried to absorb the damage and meet the needs of the soaring markets.
It’s been quite spectacular, actually. During the lockdown in the early days of the pandemic, people suddenly recognised that owning a home offered much more security than anything else. Those who already owned property wanted bigger spaces so that each family member could have privacy and room to both work, and study, online. Wellness became a priority and new-age homes that prioritised fresh air and fitness amenities were in demand. Buyer confidence, especially with RERA norms, had also gone up, and NRIs could take advantage of the digital transformation to shortlist their homes online.
Knight Frank reported that the sale of residential units for the three months of January-March 2022 was at a four-year high with 78,627 units sold across the top eight Indian cities despite the third wave. Magicbricks’ PropIndex report found that in the same quarter, pan-India housing demand rose 6.7% from a year ago and 4.6% sequentially. An ANAROCK Research report said: “Quarterly housing sales in Q1 2022 are at an all-time high since 2015 with approximately 99,550 units sold across the top 7 cities.”
Historic low rates of interest on home loans and stable, affordable, realty prices also boosted buyers’ appetite for new homes.
And yet, since this is probably the largest purchase of most people’s lives, some have been wondering whether it is the right time to buy property. It isn’t – the right time was yesterday! Prices are now on the rise and they will continue to go up, so if you are still sitting on the fence waiting for prices to reverse, we have a single word of advice for you – don’t!
As Financial Express pointed out on April 5, 2022, quoting various experts, raw material rates have gone up by as much as 20-30%. “There are chances that the property prices are likely to shoot up 15-20% in the next six months,” the article notes. The situation has got so difficult that some developers have even been forced to say they will stop construction – something that no one would wish to do at a time when the growth momentum for property is so strong.
In March, CREDAI pointed out that the prices of steel, the most important building component, doubled from Rs 42,000 per tonne to Rs 85,000 per tonne, cement bags have shot up from Rs 260 to Rs 400, the cost of four-inch brick has increased from Rs 6,500/1K to Rs 8,000/1K, sand has escalated from Rs 6,000/brass to Rs 7,500/brass, while wash sand has gone up from Rs 3,800/brass to Rs 4,800/brass. Even other inputs, such as electric wires, fittings, tiles, pipes, sanitaryware, fabrications, secondary minerals, and labour charges have seen price rises of 40%. In this scenario, developers will have no choice but to pass on the hikes to homebuyers.
Industry experts have already noted that residential property prices across eight major cities in India, including Mumbai, Delhi, Chennai, Kolkata and Bengaluru, rose by 3% to 7%, partially due to the rise in the rates of construction materials. Simultaneously, as PropTiger.com’s ‘Real Insight Residential – Annual Round-up 2021’ noted, housing sales increased 13% in 2021 to 2,05,936 units from 1,82,639 units in the previous year. In view of all this, and coupled with shrinking inventory levels, there is no doubt that the longer you delay, the more difficult it will be to find a home of your choice.
Is there cause to worry about under-construction projects being stalled in the light of rising material costs, especially with supply disruptions as the Russia-Ukraine war drags on? Generally, with such worries in mind, people have preferred to opt for ready-to-move-in homes. However, the fact is that post-pandemic projects that take health and wellness into consideration are a better choice. Also, Grade A developers who believe in timely delivery would never risk their hard-earned reputations; they would meet every challenge head-on in their bid to meet commitments to homebuyers.
So if you have been wanting to buy a good property but have been delaying the decision, it would be wise to act immediately. With the digital transformation that has occurred, this is a simpler process than it has ever been in the past; explore your choices at the click of the computer, or a tap of the smartphone.
Home loans will continue to be available at low-interest rates, especially with the recent RBI decision to extend the rationalised home loan norms till March 31, 2023. So buy that property before it gets out of reach, or you will have cause to regret the delay!
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