Homeownership is becoming harder for many middle-class Indian families. Property prices are rising fast. Wages are not keeping up. There are not enough homes for sale. Experts say this pushes more people to rent. A Reuters poll on India’s real estate market revealed these issues.
Home prices have more than doubled in the last ten years. They are expected to climb more this year and next. This is according to a survey of property analysts.
Even lower interest rates from the Reserve Bank of India have not helped much. Mortgage rates have dropped a little. However, home values have gone up so much. Monthly payments are still too high for many new buyers. Analysts note that the average age for owning a home in Indian cities is getting older. It is moving from the early thirties to the mid-forties.
Experts warn that this affordability problem could have lasting effects. It might delay people’s ability to build wealth. It will increase rental costs. It will also create a bigger gap between those who can buy and those who cannot. The report suggests that until more affordable homes are built, more people will rent.
The market focuses heavily on high-end and luxury homes. This leaves little for first-time buyers. Even with good policies, they may be priced out.
India needs about 10 million more homes. A Knight Frank India report states this. The gap could grow three times by 2030. Demand for luxury homes is strong from wealthier buyers. Supply of affordable homes has not kept up. This situation is changing how people live in cities. Many potential buyers are delaying buying homes. They are renting instead.
The housing shortage is real. Affordable housing supply has dropped in recent years. This forces buyers into the rental market. Renting is becoming a good option. Housing costs are about 2-3% a year to rent. Home loans cost 7-8% a year. The affordable housing sector was hit hard after the pandemic. Buyers became cautious. New homes and sales dropped. This is according to ANAROCK, a real estate company.