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Real estate still most preferred asset class for investment

Real estate continues to be the preferred asset class for investment and close to 50% of prospective customers are expecting prices to rise in the coming months due to strong demand during the festive season, according to a joint survey by Housing.com and NAREDCO.

As per the findings of the survey, titled ‘Residential Realty Consumer Sentiment Survey H2 2022’, 47% of respondents prefer to invest in real estate, the highest compared to other asset classes such as stocks, gold, and fixed deposit.

The data shows that 21% of respondents prefer to invest in the stock market, 16% in fixed deposits and 15% in gold.

Housing prices recorded a 7% YoY increase in the April-June quarter of 2022.

The survey findings also suggest that 48% of respondents anticipate prices to rise further in the coming months.

“India’s residential market has seen a sharp revival in demand after the second wave of the COVID-19 pandemic. The rising cost of borrowing, increase in input costs and strong demand have resulted in a rise in housing prices,” said Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com.

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“We expect housing demand to remain strong in the upcoming quarter on the back of strong consumer sentiment and the seasonal uplift in demand during the festive season,” he observed.

“According to our survey, homebuyers expect property prices to rise further in the coming months given the current macro situation, which will further drive up demand in the short term,” Agarwala said.

As per the survey, homebuyers are cautious yet optimistic about the economic scenario for the coming months; 73% of respondents feel that the economy would continue to stay on its growth trajectory in the coming months. While ongoing global uncertainties have moderated the outlook, the sentiment regarding the economy still remains well above the dip recorded during 2020.

Commenting on the survey findings, Rajan Bandelkar, President, NAREDCO, said, “The real estate sector in India is witnessing green shoots of recovery, thanks to various policy interventions implemented by the government, aiding the realty sector to grow and ensuring speedy recovery of the industry post Covid.”

“The residential markets across India remain upbeat despite the growing concerns about the rising interest rates. The stronger sales momentum anticipated in the coming months and quarters stems from the fact that property remains the best asset class in comparison to buying gold, mutual funds or making a fixed deposit. Our latest Consumer Sentiment Outlook (Jul-Dec 2022) suggests that real estate has remained a favourite asset class among potential buyers,” he said.

“Demand for housing will continue to be high. Consumers’ ever-increasing desire to own a home and their goal for financial security and stability have been a significant driving force for housing sales over the past two years. This festive season will likely bring more deals favouring first-time homebuyers willing to enter the market. With end users remaining confident about the economy in the coming months, the real estate sector will likely register a remarkable quarter, setting a precedent for the coming year,” added Bandelkar.

“Despite the hike in property prices and interest rates, homebuyer sentiment continues to remain in the positive zone for the remainder of 2022, according to our Consumer Sentiment Outlook survey. Potential homebuyers (65% of respondents) are positive regards their income stability for the coming six months; a sentiment highest since the lows of the pandemic period of 2020,” said Ankita Sood, Head of Research at Housing.com, PropTiger.com & Makaan.com.



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