Rising prices and heavy paperwork are the top concerns for Indians planning to invest in property, shows an online poll conducted by Housing.com News.
A total of 6,391 respondents participated in the two-week-long poll, conducted by the online real estate company between July 15 and July 31, 2022, casting 12,007 votes. Respondents were offered the choice to select more than one option as their voting choice.
A little over 32% of respondents selected rising prices as their top concern, when making that all-important decision. Nearly 21% of respondents found the paperwork to be their biggest headache.
In India, property deals involve months of preparation and execution of paperwork even though nearly every state in the country has been busy digitising its land record and revenue departments.
Construction quality was the third most-cited buyer concern, with 20.57% of respondents choosing this option. For others, rising home loan interest rates (over 14%) and timely completion of housing projects (12%) were big concerns.
Why does price point hurt the most?
Despite the pandemic-led slowdown, property rates in India have been increasing, slowly but steadily. Data available with the company show that the average values of new and available properties in India’s leading housing markets appreciated by 5% to 9% in the past year.
|Property prices in India’s leading markets|
|City||Average price (Rs per sq ft)*||YoY growth|
*Weighted average prices as per new supply and inventory
Source: Real Insight Residential – April-June 2022, PropTiger Research
The cost of property acquisition has become more expensive for buyers who rely on home loans. After hovering at a record low level for nearly two years, housing loan interest rates are again on the rise. The RBI has increased the repo rate by a cumulative 140 basis points to bring it to 5.40% since May 2022 and a further increase is likely.
“Apart from the basic cost, buyers also have to spend a significant additional amount to acquire property, by paying state taxes like stamp duty and registration charge, which can be restricted to 4% but can go up to 10%, depending on the state where the property is being registered. Then, there is the brokerage fee in some cases,which is not less than 1%-2% of the property cost. All these additional expenses burn a big hole into the pockets of India’s middle-class home buyers,” says Prabhanshu Mishra, a Lucknow-based lawyer specialising in property and land transactions. “Since every penny counts, price is always going to be the biggest concern for a middle-class home buyer,” Mishra concludes.