Real estate continues to remain preferred asset class for investment: Survey
Potential homebuyers are optimistic about the economy and their future earnings, which augurs well for driving demand in the property market. Real estate, in fact, continues to be the preferred asset class with 48 per cent of the respondents opining that they would want to invest in property as it is a stable hedge against inflation and is a time-tested wealth-building tool, according to a survey conducted by Housing.com in collaboration with NAREDCO.
The interest in real estate, especially in the residential segment, has grown on the back of a positive shift in sentiments regarding homeownership after the uncertainties posed by the COVID-19 pandemic. The surge in demand is evident from the fact that the markets sustained their growth momentum in the first half of the year, with both new supply and sales in the primary residential market recording double-digit growth of 44 per cent and 15 per cent YoY in the first half of 2023. The new supply is at a decade-high, and sales are at the highest since the same period in 2019.
The demand pick-up has led to a substantial increase of 6-7 per cent in the weighted average property prices. Notably, certain prime localities in cities such as Gurugram, Hyderabad, and Bengaluru have experienced double-digit growth. Beyond attracting end-users, this upswing has reignited the interest of investors who had adopted a cautious stance, waiting for better returns amid a slowdown in demand.
However, amid escalating housing prices and increasing home loan rates over the past year, prospective homebuyers are seeking tax incentives and flexible payment plans. They are also inclined towards additional perks offered by developers.
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