🏡 Why Are Housing Prices Rising?!
Top 8 bustling cities of India saw an 8-10% rise in residential prices in 2023. Why?
Hey there 👋🏼
Are you planning to buy a house soon? Or rent one?
If yes, today's piece is a must read for you!
Here's the big news:
Top 8 bustling cities of India saw an 8-10% rise in residential prices in 2023.
And this may rise to 12% next year!
Wondering why?
Read on.
What's driving the prices?
Let's go back to the basics of Economics.
Prices usually rise because of a rise in demand.
Housing prices are also rising due to high housing demand.
Housing demand in these top cities is expected to rise by a remarkable 6-9% in FY25.
The catalyst?
Rapid urbanisation.
By 2030, 40% of India's population is set to reside in urban areas. A significant jump from 34% in 2021!
Investments also seem to be pouring in to meet this demand.
The Government also launched the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund in 2019.
This fund aims at completing stressed and stalled residential projects across tier 1 and tier 2 cities in India.
It already completed 20,557 projects till date, and plans to complete over 81,000 projects in the next three years.
This fund has given a boost to India's real industry.
So much so that India’s real estate market is poised to grow to $1 trillion by 2030, accounting for a significant 13% of the GDP.
Result?
Foreign investments are also skyrocketing.
A staggering $26.6 billion flew into India's real estate market between 2017-2022!
So, demand still exceeds supply.
Who's buying these homes?
The millennials of India are rushing to buy homes.
Accounting for 34% of India's population, these millennials are shaping India's housing market.
And no, they aren't buying any homes.
They're dreaming big; they're eyeing luxury homes.
No, we're not saying this.
Data is.
Sales of luxury housing (priced at Rs. 4 crore and above) rose 97% year-on-year during January 2023 to September 2023!
Wondering why millennials are seeking comfort in luxury?
First, financial empowerment.
Many millennials are in their prime earning years, enabling investments in high-end properties.
Second, they have an aspiration for quality living.
Millennials are seeking homes with modern amenities and superior locations.
This trend is not just about lifestyle; it's an investment perspective.
Luxury homes are seen as valuable assets, promising better returns in the future (due to their exclusivity).
And now, there’s a rising trend of smart homes with sustainability features.
No wonder luxury homes are selling like hotcakes!
The Big Question: Buying or Renting?
While buying a home comes with the satisfaction of owning an asset, it's a long term commitment.
Renting, on the other hand, is more like dating.
You live with it (literally) for some time, understand the vibe, understand where your life is going and then make a long-term commitment.
A well thought, informed decision.
Looks like millennials are going all in with their relationship with homes.
Yes, a survey reveals that 70% of millennials now prefer buying over renting.
Ironically, this is in stark contrast to what's written in one of the most famous personal finance books for this generation (Rich Dad, Poor Dad):
A house is the biggest liability you own!
In fact, this is also a complete reverse trend from 2016!
Why do you think they are buying over renting now?
And would you prefer buying or renting a house?
Let us know in the comments!
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