Source: Times Property

India’s headline retail inflation rate in January 2023 saw a slight increase to 6.52 per cent after December 2022 saw an 11-month low of 5.72 per cent, according to data published by the Ministry of Statistics and Programme Implementation on February 13, 2023.

The home loan segment
Despite the recent hike of 25 basis points by the RBI and an average six per cent rise in property prices (as stated in a joint report released by CREDAI, Colliers India and Liases Foras), retail lending seems to be unaffected. Adhil Shetty, chief executive officer of BankBazaar says, “Interest rates have risen sharply through 2022. However, retail lending seems to not be impacted yet. Home loan demand was robust in 2022 and seems to have increased in the months following the rate hikes. According to our data, the average home loan ticket size in 2022 was Rs 25.19 lakh, and the demand for home loans will remain robust in 2023 despite inflation and rising interest rates. But inflation and interest rates are cyclic. People must base their homebuying decisions on their personal readiness.”

Real estate is a reliable asset class
Even though conditions might not be optimum to buy a home, many developers have been seeing no decrease in demand by end-users, many insiders like Niranjan Hiranandani, vice-chairman, NAREDCO feels that even with this uncertainty the demand for homes this year will continue, Hiranandani says “The property market may experience a lag in sales to accommodate rising EMI payouts and simultaneously evaluate postponement options for a stipulated time. But the home-ownership sentiment on most occasions overrides geo-political turbulence, spiraling uncertainties, and an escalated inflation crisis on the back of stability and social security that this asset offers.”