Track2Realty pan-India survey
While the narrative across the built environment of Indian real estate is about a bullish cycle that would continue in 2025 as well, the average home buyers across India feel there is nothing for them in the property market to be optimistic. With affordability curve beyond the vast majority of Indians, they find a house of their home to be a distant dream now.
On a scale of 0-100, the Housing Sentiment Index has been noted to be just 18; with 82% Indians categorically believing that housing is just not affordable to them. A vast majority of them, as many as 80%, believe it would take no less than 10 years of their gross income to afford a house in any of the leading Indian cities. The global benchmark is 5 years of gross income with not more than 40% of take-home salary. But 78% Indians believe it would take no less than 60% take home salary to buy a house in India.
These are the findings of a pan-India survey by Track2Realty. The survey was aimed at getting the sentiments of Indian home buyers and their outlook for the year ahead. Track2Realty tried to gauge the mood of the nation and their trust over the reports of a bullish housing market. The survey was conducted in 10 cities – Delhi-NCR, Bengaluru, Chennai, Hyderabad, Coimbatore, Kochi, Mumbai, Pune, Kolkata and Ahmedabad.
The survey looked into 5 critical areas of – Housing Sentiment; Affordability Index; Future Outlook; Trust Index; and Investment Horizon. The survey delved deeper into the consumer psychograph to find that the lower wage growth and job degrowth is number one critical concern for as many as 88% Indians.
Mumbai was labelled as the most unaffordable housing market, with no less than 90% falling into “can’t afford” zone. It was followed by Gurugram and Bengaluru, with 80% and 76% terming the respective cities as unaffordable.
About 8 out of 10, 78% Indians feel housing market across the segment is overvalued. It is not just the house price in the Top Tier cities that is affecting the morale and investment outlook of Indians. But rentals across the cities too have started pinching to no less than 68% of the respondents. Home towns seem to be the last hope of these Indians in the year ahead. Many of them, as many as 70%, are exploring the option of shifting to their home towns. A vast majority of them, as many as 68%, believe they can only afford to buy a house in Tier II & III cities now.
“There has to be some rationale behind such property price rise. The property price today has absolutely no correlation with the average or median wages in the city. If 60-70% of my take-home salary goes into serving the home loan, and added to the fact that there is hyper-inflation across the consumption items, then I simply can’t survive in the city. As a financial analyst myself, I fail to understand how could an asset class be so out of touch with the ground realities of macroeconomics,” questions Rohit Patidar, a financial analyst in Mumbai.
Will lower interest rate in 2025 bring them back to the housing market? For 76% of the respondents, it is inflation and not interest rate that has driven them out of the housing market. Nearly 9 out of 10, as many as 88%, believe there is cartelization in the Indian real estate to artificially inflate the prices. Many of them, as many as 70%, feel ever since Pradhan Mantri Awas Yojana (PMAY) and Credit Linked Subsidy Scheme (CLSS), there has been significant drop in the launches of affordable houses.
“It is not about high construction cost and definitely not about high land cost. In a given location, say Noida, one developer is launching at INR 11,000 per sq feet and the neighborhood plot has a price band of INR 20,000. What does it say? It clearly indicates a greed driven economy where the builders have been given a free rein in the name of free market economy,” says a dejected Krishna Nandan in Noida.
Reports of luxury housing boom seem to add insult to the injury of the Indians. 90% Indians question the industry & media reports that suggest income is booming and there is visible growth in the housing market. Nearly two-third of Indians, as many as 64%, even believe the reports of lower housing inventory in the market is due to lower supply of affordable houses.
More than half, 58% respondents, feel real estate is already into a bubble zone. 54% believe it is when and not whether there would be a price crash in the market. 72% believe speculative investment is driving the property market.
Is there any silver lining for the Indians as far as real estate business is concerned? 68% Indians believe in the growth story of real estate stocks. They find the leading realty stocks promising for future. Nearly half the Indians, 48% to be precise, feel it is better to invest in real estate stocks & REITs that has no affordability or ticket-size barrier.
Ravi Sinha
#RaviTrack2Media
Ravi Sinha is a journalist with over two decades of cross-discipline media exposure. He is the CEO of real estate thinktank group Track2Realty. He has been writing extensively on the real estate sector for more than a decade now. Evaluation of real estate brand performance is his core domain expertise and he has immense insight into consumers’ psychograph. He has conceptualised Track2Realty BrandXReport as India’s 1st & only objective & non-paid brand rating journal that is industry-accepted benchmark of brand equity & ranking of the Indian real estate companies.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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