An Increase in Housing Prices Is Expected by Almost 56% of Indians in 2022

Housing prices are expected to climb by 56 percent in 2022, according to the CII-ANAROCK Consumer Survey, due to inflationary tendencies in construction, raw materials, and total operating expenses for developers.

The poll for the second half of 2021 revealed that a price increase of less than 10% would have a moderate-to-low impact in a quantitative examination of the expected customer reaction. On the other hand, a rise of more than 10% would have a more significant impact on buyer sentiment.

Five thousand two hundred ten people in tier I, tier II, and tier III cities participated in the survey between July and December.

The poll found increased demand for newly launched properties in areas like the Mumbai Metropolitan Region (MMR) and Bengaluru. Although ready-to-move-in (RTM) homes are still the most desired category for 32% of respondents, this choice has decreased by 14% from the first COVID-19 wave.

Furthermore, over 31% of purchasers in MMR and Bengaluru are optimistic about freshly launched projects, potentially indicating a comeback of investors to these markets.

According to the poll, another essential element affecting this shift is that post-COVID-19, the new housing supply is dominated by branded developers, whom consumers feel as safe.

“Votes favoring real estate as an asset class grew by 3% in this survey, from 54 percent in the H1 2021 edition to 57 percent in the H2 2021 edition,” stated Anuj Puri, head of ANAROCK Property Consultants. This is especially important because housing costs are expected to climb by 5-8 percent in 2022 due to increased input cost pressure and supply chain concerns.

Hardening interest rates, expected to rise in the second half of 2022, will be another factor driving up homebuyer costs. Sixty-six percent of respondents are aware of the process of buying a home.

“However, the new pandemic-induced desire for homeownership remains strong,” “Puri noted.

The poll examined each city’s most popular property categories, including preferred house sizes, hottest-selling budget ranges, and residential plots.

Residential plots are the most popular property type in the top seven cities and tier II and tier III cities and towns.

Furthermore, for city dwellers, apartments remain the favored type of property. Only 17 percent of surveyed urban purchasers prefer plotted developments to other property types but a considerable 51 percent of respondents prefer projects from tier II and tier III cities.

Regarding budget, over 63 percent picked residences in the mid and luxury classes, with prices ranging from 45 lakh to 1.5 crores. The demand for affordable housing has declined even more, from 40% in the H2 2020 edition of the poll to 27% in H1 2021 and 25% in H2 2021.