As we move into 2023, buying a home is a significant investment for most people and the real-estate market in India is poised for growth and development. After a challenging few years, the industry is seeing a slow but steady revival in demand, with new government initiatives and favorable policies fueling growth. Here are some of the key trends that are shaping the Indian housing real-estate market in 2023.
Market Trends
The demand for affordable housing has been on the rise for a while, and this trend is set to continue in 2023. With the government’s focus on the ‘Housing for All’ initiative, more and more developers are turning to this segment to cater to the growing demand. According to a report by real-estate consultancy Knight Frank, the affordable housing segment is expected to be the fastest-growing segment in 2023, with a growth rate of 30% year-on-year.
Sustainability is becoming an increasingly important factor in the real-estate market in India, and this trend is set to continue in 2023. Developers are looking for ways to incorporate eco-friendly features such as solar panels, rainwater harvesting, and green spaces into their projects, to cater to the growing demand for sustainable living. According to a report by JLL India, sustainable homes are expected to become the norm by 2025, with green building initiatives expected to grow by 20-30% annually.
Co-living spaces, where multiple tenants share a common living area and amenities, are gaining popularity in India, particularly among young professionals and students. This trend is set to continue in 2023, with the co-living market expected to grow by 30% year-on-year, according to a report by RedSeer Consulting.
With the rising demand for housing, micro-markets or emerging residential areas are gaining prominence. These areas offer affordable housing options and have the potential for future growth and development. According to a report by Anarock Property Consultants, micro-markets such as Whitefield and Sarjapur in Bengaluru, Ghodbunder Road in Mumbai, and Sohna Road in Gurugram are expected to witness significant growth in 2023.
The real-estate industry in India is increasingly adopting technology to streamline processes and enhance the customer experience. From virtual property tours to online payment options, PropTech is becoming an integral part of the real-estate market in India. According to a report by KPMG, PropTech adoption in India is expected to grow by 30-40% in 2023.
In conclusion, there are still some challenges to overcome, such as the liquidity crisis and regulatory hurdles, the overall outlook for the sector is positive. With the government’s continued support and the increasing focus on sustainable and affordable housing, the industry is set to continue on its growth trajectory.
Assessing your financial situation
- EMI affordability
A good rule of thumb is to keep your EMI payments at no more than 30-40% of your net monthly income. You can use online EMI calculators to get an estimate of your monthly payments.
- Credit Score
A higher credit score indicates a lower credit risk, which translates to better interest rates and loan terms. In India, a credit score of 750 and above is generally considered good for home loan applications.
- Down Payment
Once that’s done, determine your down payment amount. Most lenders in India require a down payment of 10-20% of the property value. It’s important to have a clear idea of how much you can afford.
Lastly, Compare interest rates and loan terms. It’s important to compare interest rates and loan terms from different lenders before making a decision. A small difference in interest rates can translate to significant savings over the life of the loan. Make sure to read the fine print and understand all the terms and conditions before finalizing your home loan.
According to a report by the Reserve Bank of India, home loans accounted for 51% of all retail loans in India in March 2021. The report also states that the outstanding housing loan portfolio in India stood at Rs. 14.6 lakh crore in March 2021, an increase of 9.9% from the previous year.
Process of Buying a Home – In a nutshell
Buying a home is a significant investment for most people and involves a complex process. Here are the steps involved in buying a home in India:
- Define your requirements like location, size, number of bedrooms, amenities, and other factors, which will help you narrow down your options.
- Find a reputable real estate agent
- Shortlist properties and arrange for visits to the properties. During the visits, you can assess the condition of the property, amenities, and the neighborhood.
- Verify property documents. This includes checking the ownership, title, encumbrances, and any legal disputes that may be associated with the property.
- Arrange for financing
- Sign the agreement. The agreement will outline the terms and conditions of the sale, including the sale price, payment terms, and any other relevant clauses.
- Register the property in your name. This involves paying the stamp duty and registration fees, and submitting the necessary documents to the local registrar’s office.
It is essential to work with reputable agents and lawyers. By following the above steps and taking the necessary precautions, you can ensure that your home-buying experience is a positive and rewarding one.
| References: “Report on Trend and Progress of Banking in India 2020-21”, Reserve Bank of India “How to Calculate EMI for Home Loans?”, BankBazaar.com “How to Check Your Credit Score for Free in India?”, Paisabazaar.com “India Real Estate Outlook 2021”, Knight Frank India “Real Estate & ESG: Sustainability and value acceleration”, JLL India “Co-living – Reshaping the Indian Rental Housing Market”, RedSeer Consulting “India Real Estate H2 2022 report”, Anarock Property Consultants “PropTech: Changing the real estate business”, KPMG India |