In 2023, the real estate sector showed resilience amid changing trends. Global economic recovery drove up demand for residential properties in India, thanks to low interest rates and a preference for smart living and luxurious ownerships. With India’s status as one of the world’s fastest-growing economies propelled by private spending and capital buildup, the real estate sector remains a top investment choice.
Typically, Indian households allocate 77% of their assets to real estate as this asset class offers potential for high growth, strong returns, and secure income streams. Moreover, with SEBI’s new directives on fractional ownership and small REITs, the sector is poised further for significant expansion in 2024.
However, navigating the real estate market and choosing right investment outlets as per current government regulations and rates, can be daunting, especially for newcomers.Also Read: Income tax strategies for real estate investors: Maximising deductions and minimising liabilities
This article explores diverse real estate investment options suitable for various investor profiles and risk appetites.
1. Rental properties
The traditional approach involves acquiring residential properties for rental income. While straightforward, this method requires significant upfront capital and ongoing maintenance costs. Before investing, ensure the property is free of legal issues. Acquisition options include leasing, outright purchase, or financing through loans.
Notably, there’s a rising trend of investing in luxury rental properties, especially in major Indian urban centers such as Mumbai, Delhi, and Bangalore. Industry data indicates that luxury residential real estate in these cities consistently surpasses other traditional assets, boasting an annual price growth of 4% to 7%.
2. Holiday homes and house flipping
Affluent buyers are expanding their property portfolios beyond primary residences to include lucrative second homes. In India, the demand for secondary residences has skyrocketed post-pandemic, reaching a staggering $1.394 billion by the close of 2021—an impressive 88.63% surge from pre-COVID levels.
Combined with strategies like house flipping, where properties are renovated for increased resale value, Indians are capitalizing on their second homes by turning them into holiday retreats, drawing significant tourist interest.Also Read: 5 essential strategies for maximising REIT investments in FY 24-25
3. REITs and ETFs
Exchange Traded Funds (ETFs) and mutual funds provide indirect exposure to real estate by investing in related assets. Options include ETFs focused on real estate stocks, such as publicly traded builders, or those invested in REITs (Real Estate Investment Trusts).
REITs function similarly to mutual funds by gathering investor capital to purchase income-producing assets. These assets generate rental income, which is then distributed to investors as dividends. Investing in REITs offers various benefits such as immediate liquidity, affordability, regulatory protection, tax advantages among others. With dividends constituting a significant portion of profits(90%), REITs provide a steady income stream, often tax-exempt.
4. Fractional ownership of commercial real estate
This innovative approach involves multiple investors pooling funds to jointly purchase a commercial property. This reduces individual investment costs and risk exposure, while allowing shared rental income. Industry experts forecast significant growth in this segment with fractional ownership properties in India projected to reach $8.9 billion by 2025, growing annually at 10.5%.
Commercial properties typically offer higher rental yields compared to residential options. A 25 lakh investment in fractional ownership could potentially generate ₹2 lakh in annual rental income (calculated at 8-12 percent rental yield), coupled with at least ₹1.25 lakh in capital appreciation per year, contributing to wealth creation and improved monthly cash flow.Also Read: Your Questions Answered: I want to invest in Nifty Realty Index. Please elaborate on it and how it is taxed?
Choosing the right option
The optimal investment option depends on various factors, including your available capital, desired liquidity preferences, preferred cash flow regularity, and risk tolerance. Owning, leasing, and flipping properties generally require substantial capital and experience in the real estate market.
ETFs provide high liquidity and lower costs but may not offer monthly dividends and might require selling shares to realise returns.
REITs and fractional ownership, though relatively new, are gaining traction as they provide access to the lucrative commercial real estate (CRE) sector for retail investors. While CRE offers good returns, it traditionally requires high capital investment.
Fractional ownership presents a lucrative opportunity with potential annual rental yields between 8 to 12 percent and Internal Rate of Return (IRR) ranging from 13 to 17 percent. Prime properties and retail complexes in business hubs like Gurugram that have emerged as one of the most prospective markets in real estate lately, offer both steady rental income and prospects for capital growth.
All this suggests that fractional ownership of commercial real estate could yield higher and more stable returns in the long run compared to other options and deserves serious consideration for those seeking to diversify their investment portfolios and build long-term wealth.
Aankush Ahuja, Founder and CEO FOIP
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
In today’s fast-paced era of urbanisation and increasing wealth, many people have set owning a second home as a concrete goal. A study conducted by the McKinsey Global Institute reveals that the projected growth of urban areas in India indicates a substantial market potential, with an estimated urban population of 600 million by 2031.
Investing in second homes presents an enticing opportunity, offering both financial gains and personal fulfilment. These properties can add diversity to your real estate portfolio and generate passive income through rentals. However, before making a purchase it is essential to keep the following points in mind:Also Read: Real Estate: How can you maximise wealth with MSM REITs investments?
Know why you are buying
Why are you interested in purchasing a second home? Is it for a vacation getaway, an investment property, a place to retire, or some other reason? This decision will greatly influence where you choose to buy, what type of property you choose, and how much you can afford.
According to a research study conducted by 360 Realtors, the demand for second homes or holiday homes in India has significantly increased in the wake of the pandemic. The total value of holiday homes in the country reached a staggering $1.394 billion by the end of 2021, marking an impressive growth of 88.63% compared to the pre-COVID era in 2019.
The report highlights that an increasing number of individuals are investing in second homes as an escape from the fast-paced city life.
However, make sure you conduct research on potential locations based on your desired lifestyle, property values, potential rental income (if applicable), proximity to family and friends, and ease of access. Also, compare property taxes, insurance costs, and any regulations that may apply to different areas.Also Read: Are real estate investors keen on fractional real estate? 3 experts share insights
Review your financial situation
Ensuring the stability of your financial foundation is crucial before taking on such a responsibility, especially if you already have outstanding debt. Before you think about getting another mortgage, it’s important to focus on paying off any high-interest debt you may have. To determine your debt-to-income ratio, divide your total monthly debt payments by your gross monthly income.
To estimate the monthly mortgage payment for your second home, use a mortgage calculator and consider different loan terms and interest rates. It’s recommended to keep your debt-to-income ratio below 50% when applying for a second home loan. Having a high ratio can make it harder to qualify for a loan and may impact your overall affordability.
Next, strive for a significant down payment, usually 20% or more, to minimise your loan amount and monthly payments. Explore options such as using existing savings or liquidating assets to raise funds.
Consider additional expenses such as property taxes, homeowner’s insurance, maintenance, and potential rent if applicable. Verify that your budget can adeptly manage these new financial responsibilities without compromising your current lifestyle or endangering existing debt repayments. Additionally, make sure to maintain a substantial emergency fund to handle unforeseen expenses without jeopardising your ability to meet mortgage payments.Also Read: Retirement planning: What is a reverse mortgage and how does it work? MintGenie explains
Explore available financing alternatives
To better understand your maximum borrowing capacity and the interest rates that apply, it is advisable to obtain pre-approval for a mortgage on your second home. This will improve your offer and make it easier to take swift action when you find the perfect property.
Examine various second home loan options, comparing interest rates, terms, and fees among different lenders before making a decision. Investigate the possibility of down payment assistance programs based on your location and financial circumstances.
Above all, seek guidance from a financial advisor to review your financial status and objectives. They can assist in evaluating affordability, devising a strategy for debt repayment, and examining alternative investment options in case a second home acquisition is presently impractical.Also Read: Home loan interest rates: These are the rates charged by top 5 banks
Evaluate the legal aspects involved
Before embarking on the journey of owning a second home, it is essential to be well-informed about the significant legal aspects associated with it. Thoroughly examine the property’s title and any encumbrances present. It is crucial to confirm the legitimacy of the title deed to ensure that the seller is the rightful owner and that there are no disputes or claims regarding ownership.
Carefully scrutinise the document for clarity and ensure that there are no ambiguities. Additionally, obtain an encumbrance certificate to verify that there are no legal claims, debts, or mortgages associated with the property. This step is essential to protect against potential legal complications in the future.
Equally important is confirming that the property has obtained all necessary approvals and adheres to regulations. Ensure that the property possesses all required building permits and holds a valid occupancy certificate. This step ensures compliance with construction regulations and affirms that the property is safe for habitation.
Know the tax benefits
Don’t forget to take into account the tax advantages associated with owning a second property. By deducting the entire interest paid as an expense from the rental income, in addition to the standard deduction for maintenance costs, you can lower your overall taxable income. As time goes on and the property’s value increases, it can become a valuable asset that generates an income adjusted for inflation, which can be utilised to finance your objectives.
In conclusion, purchasing a second home is an exhilarating experience. However, it is vital to remember to establish a budget, clarify your objectives, conduct thorough research, seek professional assistance, secure financing, complete the necessary paperwork, and safeguard your investment through insurance and routine maintenance.
Atul Monga, CEO and Co-founder of Basic home loan
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Real estate as an asset class has long been a mainstay for investor portfolios, both small or large. While it has mostly been focused on residential real estate, the turn of the century brought in another sub-asset class in the form of commercial real estate, which became the go-to product for high net-worth individuals (HNIs), since the rental yields were far higher than residential real estate.
However, the large ticket size meant that the asset class was always exclusive to HNIs or institutional investors. Over the last half a decade, with the advent of tech platforms and listing of Real Estate Investment Trusts (REITs), this asset class has become more accessible to the general public due to smaller ticket sizes in which investors can invest. In order to further stimulate the growth of this asset class, SEBI plans to introduce MSM REITs – a new way to invest into commercial real estate.Also Read: MSM REITs: How SEBI’s game-changing move will transform India’s real estate investment landscape
What are REITs and why is there a need for MSM REITs?
In simple terms, REITs own a portfolio of commercial properties and investors can purchase units of REITs to gain exposure to this portfolio. Similar to investing in units of a mutual fund scheme, investors gain exposure to the portfolio of assets the scheme owns. REITs manage those properties and collect rentals from the tenants occupying them, which is further distributed to its investors.
Currently, there are four listed REITs in India, 2 sponsored by top developers namely Embassy REIT and Mindspace REIT and 2 sponsored by investment managers namely Brookfield REIT and Nexus REIT. Each of these 4 REITs have a diversified portfolio of underlying properties across Tier 1 and Tier 2 cities in India.
However, certain investors want to gain exposure to specific assets, where they know the entire characteristics like the property, tenant, lease structure, yield profile etc. This is where MSM REITs will enable investors to make property specific investments. Extending our example of regular REITs being equivalent to owning units of a mutual fund scheme, MSM REITs can be thought of as being equivalent to owning a share of a single company. It would allow investors to create their own customized portfolio based on their own unique requirements, just like investors can create their own portfolio by picking up shares in multiple stocks.Also Read: Are real estate investors keen on fractional real estate? 3 experts share insights
How can one find the right MSM REIT to invest in?
An investor should understand and research extensively the underlying asset held by a MSM REIT. To get an investor started on the research, have listed a few parameters which an investor should look for:
Quality and location: These two are arguably the most important features, which an investor needs to assess before investing as the best quality tenants occupy the best buildings in the best locations. Therefore, it is important to visit the asset physically, which enables the investor to ascertain the asset quality as well as the surrounding micro-market.
Grade A properties are usually located in Central or Secondary Business Districts of the city. They come with quality amenities, impressive lobbies, LEED or IGBC certification, high ceiling heights and are built by Grade A developers. In case an investor is unable to visit physically, the location of the building along with the quality of the developer and tenant (like Fortune 1000 or Indian top 100 companies) can serve as a good proxy to assess the quality and location.
Lease structure: In a typical commercial lease, the tenant has lock-in for only a small duration of the lease (3-5 years), while the landlord is ‘locked-in’ for the entire lease period (5-15 years). During the lock-in period, the party which is ‘locked-in’ can’t terminate the contract. An attractive MSM REIT would be one in which the remaining lock-in period is at least 2-3 years and the remaining lease period is at least 5 years.
Moreover, it is important to also understand who has invested in the fit-outs. One should prefer an asset where the fit-outs are done by the tenant, as that improves the stickiness of the tenant and reduces the chance of vacation by the tenant.
Demand/supply dynamics: A good quality asset with a good tenant, has to be understood along with the expected demand and upcoming supply in the location. When compared to the demand, if a micro-market sees a much larger upcoming supply, it pushes the vacancy higher, which puts a significantly downward pressure on the rentals as it gives the bargaining power to the tenants to renegotiate the rents.
Hence, an investor should look for markets which have a vacancy below 10% and favorable demand and supply characteristics. The vacancy and demand/supply data are published regularly by research teams of large IPCs (International Property Consultants) like JLL, CBRE and Knight Frank which can be a good starting point for research.
Management quality: The performance of a MSM REIT will be heavily influenced by the quality of its management team. Poor decision-making, lack of experience, or ineffective property management can impact returns. Therefore, an investor is advised to invest in a MSM REIT, whose management team has a proven track record in investing and exiting assets.Also Read: Real estate dominates Indian household savings with highest allocation: Report
Is diversification necessary in MSM REITs?
Just like in any other investment, diversification is important in MSM REITs as well. However, the diversification will now be under the control of individual investors. We have suggested a couple of ways in which an investor can diversify:
Based on asset class: As the industry matures, there will be MSM REITs available across multiple asset classes like office, retail, warehousing, industrial, hospitality, etc. An investor should be able to invest in assets across all of these and benefit from the upward movements of any particular asset class in a cycle. For example, we are beginning to see asset class diversification in regular REITs as well – the first three REITs to be listed were office, post which the first retail REIT got listed last year. MSM REIT can also be expected to follow a similar trend.
Based on geography: Another way to diversify would be investing across multiple cities and minimizing the city risk at a portfolio level. In fact, this risk is present in some of the listed REITs as well. For example, embassy REIT has a significant majority of its portfolio in Bangalore. Having this flexibility to diversify, would allow the investor to pick and choose markets with strong fundamentals like low vacancy and consistent rental growth.
What are the risks involved?
Like any other financial investment, the MSM REITs will come along with its own set of risks which an investor must be aware of before investing. Some important ones are listed below:
Tenancy: Given that the MSM REIT will have only a single or maybe a handful of tenants, the risk of the tenant vacating the property will always be there. To mitigate this, we recommend investors to conduct a thorough research about the market, tenant, as well as the lease structure. Diversifying across multiple MSM REITs will reduce this risk over time as it is unlikely that all of the tenants vacate at the same time.
Interest rate: Similar to any yield oriented product, MSM REITs also have an underlying interest rate risk. When interest rates go up, an investor would expect higher yield as safer investments like FDs and government bonds start offering higher returns. This leads to fall in REIT prices as prices move inversely to yields.
Liquidity: As MSM REITs are expected to be listed on stock exchanges, they will be much more liquid as compared to a direct real estate investment. However, in times of market stress, it may be challenging to sell MSM REIT units at a desired price, just like a regular REIT. Investors can mitigate this risk by allocating capital for the long term (over 4-5 years).
MSM REITs vs. Regular REITs
A key point to note is the difference in the ticket size. While regular REITs have a ticket size of only one unit (having unit size of less than Rs. 400), MSM REITs are expected to have a minimum ticket size of Rs. 10 lakhs. This large ticket size is to ensure that investors perform thorough research before investing given the nascent stage of the industry. However, as time progresses, the ticket size restriction may be relaxed, similar to the way minimum ticket size in REITs was reduced to one unit from Rs. 2 lakhs initially.
In conclusion, MSM REITs will present a unique opportunity to invest in rent generating commercial assets. For investors who want to choose the assets and micro-markets they invest in, it will reduce the minimum ticket size. Moreover, for the developers and holders of institutional asset managers, it will allow them to bring those assets to market, which were earlier too small for regular REITs and too big for HNIs, thereby providing further boost to commercial real estate.Kunal Moktan is CEO and Co-founder, Property Share.
Here’s your comprehensive 3-minute summary of all the things Finance Minister Nirmala Sitharaman said in her Budget speech: Click to download!
Over the past month, my 6-year-old son and I have been learning how to solve the Rubik’s Cube – and here is something that got me thinking. It is incredibly difficult to solve the Rubik’s cube, much like navigating the complexities of investing. The cube has 43 quintillion combinations, and if you stare at it long enough, you will find it mind-boggling. Similarly, even investors with several years of experience and expertise find investing challenging.
A Rubik’s cube has multiple interconnected parts; one wrong move can take you back to square one. Investing is similar – myriad factors, such as inflation, currency, interest rates, company profits, company management, etc., hold sway over investment success, and one wrong investment decision may lead to significant losses. No wonder those who crack the code, i.e., solve the cube or become successful investors, are raised to a pedestal, and treated as geniuses.
Does this mean that if you are not a genius, all your attempts at solving the cube or investing are in vain? Fortunately, no.
Here are some parallels that I figured between investing and solving the Rubik’s cube:
Building muscle memory is essential to succeed: Practice. Practice. Practice. Solving the cube on your first try would be nearly impossible. You need to keep practising, learn tricks along the way and build muscle memory such that it eventually falls into place.
Investing world parallel: The same principle applies to investing. Investors and advisors who spend decades investing develop muscle memory that makes them better investors. Their expertise stems from having gone through similar trends multiple times over decades – and they can leverage this experience to distil noise while advising clients.
Rule-based approach: In the Rubik’s cube realm, there is a stark contrast between a structured approach—often termed ‘algos’—and haphazard, erratic steps. Unsurprisingly, the structured approach is a clear winner. These ‘algos’ offer a streamlined path, enabling swift progression through the cube’s complexities and eliminating tedious backtracking. Over time, these algorithms become ingrained, eventually becoming second nature in solving the cube.
Crafting strategic foundation: Investing success also involves a series of processes with multiple checklists, protocols, and sub-activities that can institutionalise the process of investing. Jumping between steps or being haphazard is a recipe for disaster. Steps such as creating a detailed plan or an IPS (Investment Policy Statement), focusing on asset allocation, strategy around security selection, a stringent review mechanism and being vigilant on cost, can form a foundation on which to build your investing success. For experienced advisors, these steps almost come naturally, almost like Rubik’s Algos.
Role of imagination, innovation, and honing the cutting edge
The record time to solve the cube has come down from one month (1974) to 23 seconds (1982) to today’s world record of 3.13 seconds. This staggering reduction in solve time is due to profound innovation in three areas:
a) Physical attributes of the cube, for example, drift, speed cubes, etc., b) Worldwide acceptance and availability of resources and training, and c) Intuition-driven speed-solving algos such as F2L, CFOP, ZZ.
Transformative Shifts: Pertaining to the investment landscape of India’s sophisticated investors, we are witnessing transformative changes driven by innovation, deepening of talent pools and implementation of global best practices and supportive regulations. Consider this:
Innovation: Innovation in products and platforms such as REITs, private equity, AIFs, large value funds (LVFs), are expanding the HNI and UHNI investment landscape. Investors can choose from a wide range of portfolio managers, advisors or distributors that are the ‘right fit’ for them. This rapid innovation is unlocking phenomenal opportunities for sophisticated investors.
Talent pool: Enabling regulations such as the IBC Code, RIA regulations and more lowers entry barriers for talented managers, creates a level playing field and protects the rights of investors. This opens a large segment of the talent pool which looks at investing as a viable career – leading to greater innovation and better investment frameworks – a virtuous cycle!
Global best practices: India is embracing global best practices across Mutual Funds, PMS, AIF and RIA regulations. Through the GIFT City initiative, we are becoming a jurisdiction of choice, both for Indian investors to access foreign markets or for foreigners to invest in India. Not surprisingly, we are seeing ever-increasing flows into financial investments from across the ecosystem, including mature investors such as family offices and institutions.
Although there is no hidden formula for mastering the game, adhering to a consistent and disciplined approach can be the key to attaining the ultimate prize in both conquering the cube and excelling in the art of investing.
Himadri Chatterjee, Head, Advisory & Key Clients Group, 360 ONE Wealth
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Commercial real estate (CRE) has long been an attractive investment avenue for those seeking to diversify their portfolios and capitalise on the stability and income potential of real property. Real Estate Investment Trusts (REITs) have been a game-changer in the global investment landscape, providing investors with a unique proposition to participate in the commercial real estate market. In a bid to catalyse the growth of the real estate sector in India, the Securities and Exchange Board of India (SEBI) has plans to introduce an innovative concept – the MSM REITs.
These MSM REITs, with a reduced minimum asset size of ₹25 crores, aim to foster a broader range of real estate investments while ensuring transparency, control, and credibility for investors. The minimum ticket size of Rs10 lakhs provides accessibility to retail investors while maintaining a certain level of sophistication.
This article explores the key features and advantages of MSM REITs, comparing them to traditional models and drawing parallels with global small-cap REITs.
Transparency, control and niche targeting
MSM REITs adopt a niche-targeted approach that allows investors to choose specific asset-focused schemes, offering transparency and control that goes beyond traditional blind pool investments. This provides investors with a clear understanding of the modalities and fundamentals of their investments ensuring a level of customisation and transparency that aligns with their evolving preferences.
Mandatory sponsor commitment and credibility
MSM REITs maintain the core structure of traditional REITs, comprising a Trustee, Sponsor/sponsor group, investment manager, and investors as primary stakeholders. Notably, in these MSM REITs, the Investment Manager and Sponsor can be the same entity. The proposed regulations ensure mandatory Sponsor commitment, fostering a ‘skin in the game’ mindset, and set minimum net worth requirements for the investment manager and sponsor, enhancing overall credibility.
Enhanced liquidity, easy transferability and low volatility
Listing units on stock exchanges introduce fair pricing, robust risk management, guaranteed settlement, high liquidity and easy transferability. Unlike the traditional models in the CRE investing space with long investment horizons, MSM REITs allow investors to exit at a time and price of their own choosing. Despite being a listed product, volatility remains low due to the backing of fairly stable assets.
Standardised regulations, risk mitigation and investor protection
The transition from the earlier models to a more structured approach in MSM REITs is a paradigm shift towards investor protection. Standardised regulations, Know Your Customer (KYC) norms, grievance redressal mechanisms, and the oversight of regulatory bodies collectively fortify investor confidence. The non-permissibility of investing in under-construction assets mitigates the risk of non-completion and disruption in returns. This prudent measure safeguards investors from uncertainties associated with projects still in progress, aligning with the aim of providing secure, stable and predictable returns.
In conclusion, incorporating MSM REITs into an investment portfolio offers investors a unique combination of stability, income generation, and growth potential. Drawing inspiration from global practices, the introduction of MSM REITs in India has the potential to mirror the success of small-cap REITs, single-asset REITs in other markets, such as the United States and the UK. This represents a progressive stride in the Indian real estate investment landscape.
By incorporating transparency, control, credibility, and investor protection, these REITs aim to stimulate further growth in the real estate sector and related segments of the economy. As India embraces this innovative approach, the MSM REITs have the potential to become a catalyst for a more inclusive and vibrant real estate investment ecosystem.
Abhishek Katiyar, VP of Strategic Initiatives at Property Share
Here’s your comprehensive 3-minute summary of all the things Finance Minister Nirmala Sitharaman said in her Budget speech: Click to download!
The real estate market, a key driver of the country’s economy, has been undergoing rapid evolution and growth in recent years. Fueled by increasing urbanisation and rising incomes, the housing sector has become a significant contributor to India’s economic landscape. With a surge in demand for homes, major builders have made strategic adjustments to pricing, fostering expectations of a positive trajectory for house prices in the coming years.
Anticipated rebound and opportunities amidst evolving market dynamics
Looking ahead to 2024, optimism prevails as the sector is poised to rebound from the challenges encountered in 2023. Analysts anticipate a more favourable market environment, citing the presence of pent-up equity seeking housing opportunities. Whether you’re a first-time buyer or an investor eyeing property expansion, staying abreast of real estate trends is crucial for making well-informed decisions in this dynamic market.
What makes India’s real estate sector an attractive investment option?
The depth of capital in Asian markets, including India, is diversifying, with real estate emerging as a favored sector for increased allocations. India’s position as one of the fastest-growing economies globally, driven by private consumption and capital formation, makes the real estate sector an attractive investment option. Investors are exploring opportunities across various real estate segments, such as office spaces, logistics, private credit, residential properties, and data centres.
Considered a long-term and secure investment by financial experts, the future of the real estate sector appears promising. A report by Concorde outlines a robust Compound Annual Growth Rate (CAGR) of 9.2% for the real estate sector from 2023 to 2028. The year 2024 is expected to mark the next phase in the evolution of real estate, driven by factors such as continued urbanisation, growth in the rental market, and steady appreciation in property prices.
According to experts, the residential real estate market is set to remain within affordable limits, reaching a three-year high in 2024. The JLL Home Purchase Affordability Index indicates that metro cities like Mumbai, Delhi NCR, and Chennai will spearhead this surge in the real estate sector. Furthermore, the expected repo rate cut, ranging between 60-80 basis points, is anticipated to maintain home prices within an affordable range for buyers.
Expert views on sustainable growth in the residential market
For sustainable growth in the residential market, experts emphasise the importance of government prioritisation of affordable housing schemes and incentives for banks to offer lower interest rates, especially for first-time buyers. This approach could lead to organic and sustainable expansion in the residential market, ensuring a balanced and inclusive growth trajectory.
What are the home loan rate projections for 2024?
Looking specifically at the financing aspect, projections for 2024 suggest that home loan rates will likely remain stable, with no substantial impact on residential demand. Instead, the critical factors influencing residential sales in 2024 are expected to be affordability and the income outlook for potential purchasers.
In conclusion, the real estate market is poised for positive developments in 2024, driven by a combination of market dynamics, government initiatives, and investor confidence. With a focus on affordability, sustainable growth, and strategic financial measures, the sector is set to play a pivotal role in India’s economic landscape, offering opportunities for both homebuyers and investors alike.Rishabh Siroya, Founder of Siroya Corp
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!