There were various assumptions in the market when we saw the outbreak of the recent pandemic with multiple waves. The general prediction was that the Indian real estate market will witness a crash. This belief, however, stands defeated in light of the contrasting trends visible in the market.
The prices of construction raw materials are steadily increasing over the last couple of months. The raw materials being used in construction have seen a hike due to many domestic and international factors. Cost of materials like steel, cement and PVC pipes have soared. There has also been an increase in the prices of piping and insulation materials as a result of an increase in the prices of resin and polymers (Source: Financial Express). This rise in the prices may affect the final pricing of the properties at some stage.
Polls have predicted that prices of homes would grow on average 2.5% nationwide this year, an upgrade from next to nothing, 0.75%, expected in a survey three months ago.
Housing sales surged by 113% y-o-y in the top seven cities from approximately 29,520 units in Q3 2020 to nearly 62,800 units in Q3 2021, according to a report by ANAROCK.
Compared to Q3 2020, average property prices rose 3% y-o-y in Q3 2021 in the top seven cities due to increased development input costs – to Rs 5,760 per sq. ft in Q3 2021 from Rs 5,600 per sq. ft in Q3 2020.
In real estate, we always say that any time is a good time to invest in a property. However, seeing the current turn of events, it is wise to invest in real estate right now and take the advantage of low interest rates and at the same time minimise the risk of increase in prices owing to the constant increase in raw material cost.