The land of diversity!

The land of a billion people.

The land of a million dialects.

The land of a thousand ideologies.

India is a nation which takes pride in the way it functions, the way it accommodates the needs of every single person and the way it responds to the problems that we as a society face.

But does India literally accommodate everyone or most people or people who need or people who genuinely want !

No, that’s because of the existing housing crisis- Opines India’s leading Real Estate Advisor, Strategist and Astrologer, Hirav Shah.

Well this can be addressed and countered by

1.Bringing down gaps between incomes and EMIs

The lock down has resulted in lower income for home buyers. However, over the years, incomes have been increasing and property prices and interest rates have been moving southwards. As a result, we have a situation where the EMU-to-income ratio has come down from about 50 percent in 2014 to about 24 percent in 2021. And this is a very healthy indicator.

2. Bringing Down gaps between Rental yield and bank FD rates

Earlier, rental yields in only a few big cities were a low of 1.5-2 percent. With the decline in property prices and increase in rental over the years, rental yields are now in the range of 3-4 percent. During the same time, the interest on bank FDs has reduced from 8-8.5 percent to about 5-6 percent. This has significantly alleviated the incentive to defer the decision to purchase a property.

With most of the deflationary factors having fizzled out, the consumption-driven buyers are using the present chance to buy the largest possible apartment their incomes can justify. At the same time, the investment-driven customers are waiting for the inventory to deplete further. However, given the easy global money and reduced supply, the wait for the bottom is unlikely to go beyond this year.

3. Resolving The Housing Crisis

As long as developers keep paying for certainty the crisis will continue. As long as non-profits refuse to recognize that rising costs mean fewer, more expensive units for them, the crisis will continue. As long as politicians and the public continue to say we need “more affordable housing” rather than “we need more housing so that it will be affordable” the crisis will continue.

This isn’t a conspiracy theory or a flight of fancy; it’s the simple truth. This is why we have a “crisis.”

Under this system, prices will keep rising and that will rationalize more fees — economically and politically — and those prices ensure that poor people will struggle to pay for rent. That struggle will be highlighted as the reason to add more fees to pay for “affordable housing.”

It is also a vicious and harmful cycle that destroys lives and vacuums up human capital at the lower levels of the economy as poor people wait in longer lines for housing, a necessary outcome of a system built on intentional, institutionalized inflation created by over regulation.

It is a system locked in place by developers too quick on the draw with their checkbooks, nonprofits unwilling to innovate, and politicians pandering to ideological constituencies that can’t accept supply side solutions because it would somehow let developers “off the hook.”

What we need is more housing of all kinds in all neighborhoods for people of all levels of income. Too much regulation prevents that, creates the need for more and more subsidies, and ensures higher prices that most seriously hurt people who have less money to spend on housing.

Stop paying the exactions for short term certainty, take on the non-profits and demand they address rising regulatory costs and barriers, and invest in the intellectual project of persuading the public that yes, indeed, the earth moves around the sun and spins on it’s axis. That is what is true. So is supply and demand.

4. Goodbye To Uncertainty

A huge hindrance in the real estate industry is a large amount of unsold inventory, which makes it difficult for real estate developers to roll over the funds to start new projects.

Introducing Hirav Shah as part of your real estate strategy team can help you reap the benefits of certainty in your business strategy. His detailed analysis of your unsold properties in real estate can give you the insights and the clarity you need to ensure the certainty of project sales.

Statistics of Housing Market in India

Led by two prominent markets —Mumbai and Bengaluru — that were hit hard during the wave, the country’s housing market is charting its course towards a comeback. The latest data tells that the property registration in the largest market – Mumbai Metropolitan Region (MMR) – hit a decadal high in July. At 9,037, the number of registrations was the highest in July since 2011.

According to a study, the April-June quarter sales of residential units grew 1 per cent in Mumbai over the previous quarter. New launches surged 33 per cent quarter-on-quarter (QoQ).

In Bengaluru, traditionally the largest market after MMR and the National Capital Region of Delhi (Delhi-NCR), it jumped 47 per cent.

According to Hirav Shah, property registrations in Mumbai have steadily grown steadily since June.

New registrations in August have also shown an encouraging increase and bear testimony to the fact that demand for new homes remains intact,” said Hirav.

The calibrated reopening of economic activity has resulted in an upward trajectory of home-buying demand and sales in August on the back of stability and security it offers during a crisis,” said Hirav.

According to him, pent-up demand, historic low home loan rates, and government interventions like stamp duty waiver, are lifting market sentiment.

While the top two metros in the West and South are raising hopes, the market in the North – led by Delhi-NCR – remains a matter of concern. Home sales in the second-largest market dwindled in May-July and fell 55 per cent QoQ.

Final Thoughts

India has been witnessing rapid urbanization in the last 15 years. According to estimates every minute 30 people migrate from rural to urban India. In 2011, 30% of India’s population lived in urban areas. By 2030, this percentage is expected to go up to 40% and the number of people living in India’s cities is expected to reach a whopping 630 million.

This pace of urbanization poses a challenge to the urban local bodies and to governments across various facets such as housing, demand on energy utilities, climate impact, security & crime rates, public health systems etc. Of all of these, adequate and decent housing for everyone remains the foremost requirement – Wraps Up Hirav Shah, India’s Favourite Real Estate Astrologer and Strategist.