Market Volatility to Fuel Greater Investments in Real Estate: Experts

Realtors believe that recent volatility in the Indian stock market is likely to fuel more investments in the real estate sector. Besides, the banks have hiked interest rates, which would have an impact on the industry. Although real estate investors are apprehensive of the growth factor, they are willing to continue to channel their funds into the sector.

The demand for residential real estate has increased manifold in recent years. After two years of the pandemic, the buyers are all bracing up to invest in properties. Most importantly, the demand for ready to move homes is still high. Lots of unsold inventories are available for the residents to choose from. At the same time, the demand for commercial real estate has also increased. The commercial plots are currently under high demand.

Recently, the Reserve Bank of India has increased its REPO rate by 40 basis points. This has led to an increment in the home loan rates. The leading lender in this sector, HDFC, has increased the interest rates on their home loan by 30 basis points. Some of the other banks that have increased their interest rates include Bank of Baroda, ICICI Bank, RBL Bank, and others.

However, the sales figures would not bear the scars even when the interest rates increase. Although there might be some initial impact, experts believe that it wouldn’t make a serious dent in the sales numbers. Considering the volatility in the stock market, investors consider real estate to be a much secure avenue to park their funds. This uncertainty in the Indian stock market has pushed a significant number of investors towards real estate.

Currently, there are more than 6 lakh unsold apartments in India. The concentration of this unsold inventory is particularly high in the Western cities, including Pune and Mumbai. This area has around half of the unsold properties. Residents are looking for ready to move apartments in these cities. Again, NCR and Delhi have more than 1.7 lakh unsold apartments. Other cities with high concentration of unsold flats include Hyderabad, Chennai, and Bangalore. Currently, these cities have around 1.4 lakhs unsold apartments between them. This figure is relatively lower in Kolkata, around 40,000. Therefore, investors are likely to channel their funds to the real estate sector to beat the stock market volatility.