- One may term it quite common in the Indian society’s parlance, the clamour, planning, passion, and preparations to possess a roof of our own permeate every stratum irrespective of social standing. It is deeply ingrained in us from the early days of our existence in Indian society about the importance of owning a small house. Yes, a typical middle-class upbringing is often associated with this critical aspect, in addition to good education and quality living standards. As such, the efforts to have a roof in our possession commence in the right earnest. We are aware of how these efforts pan out in a country where the majority population is identified with the middle and lower-middle class, despite making tremendous progress economically in the last few decades.
PC: Save Max Real Estate
- We are the fourth-largest economy in the world, aiming to become one of the most advanced nations by 2047. Aspirational society is finally finding its spoors in economic terms. The availability of housing and, in turn, the real estate sector play a critical part in our economy. The moot point to ponder over here is whether the real estate is living up to the expectations, meeting demand, and keeping the prices well within the reach of common citizens aspiring to own one. As reported recently, home prices are rising steeply, even as unsold homes pile up. This situation is strange, showcasing a worrying disconnect from reality. Let’s dwelve further into the same. Some interesting tidbits. The average life expectancy in India was 71 years before the pandemic.
PC: Hindustan Times
- Long enough to be a grandparent, but not a homeowner in Mumbai. Shocking but real, you see. Even the top 5% – financial outliers – would need 109 years’ savings to fund a 1.184sq-ft, 2-bedroom purchase in the financial capital. A Delhi home seems hardly affordable with a commitment of 35 years’ savings. The point is that few can buy a house in India today. Yet, houses are being built at ever higher price points. In the Mumbai region, builders announced projects with over 1L houses last fiscal, although more than 5L remain unsold. In Pune, 2.4L houses are unsold, 1.1L in Hyderabad, and 68,500 in Delhi-NCR. Housing must be the only industry where sellers aren’t bothered by inventory. It’s also the only one immune to the laws of demand and supply.
PC: Moneycontrol
- Further, consider how prices in Hyderabad have jumped 43% in five years despite 177% growth in unsold inventory. Peculiarities of the Indian housing market don’t end there. Houses are expensive not just by Indian salary standards but globally. Housing is a primary need, so the government must figure out what is pushing prices beyond buyers’ reach. Families stake their future on buying a house somehow, and their steep monthly commitments squeeze demand for other things – cars, refrigerators, TVs, etc. That 1,184sq-ft Mumbai apartment costs Rs 3.5cr, on average. A 15-year loan of this size means an EMI of Rs 3.6L. But an equivalent loan in the US costs only Rs 2.8L per month. Costly homes, costlier loans – the government has its task cut out.
