With lower prices, now is the best time to buy a house in India: HDFC chief

Though property prices in major Indian cities have more or less stayed the same, people's income levels have gone up

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Ashwani Kumar

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Published: Fri 26 Nov 2021, 2:02 PM

This is the best time to buy your dream house in India and people must not postpone their decision as prices will not drop, a top industry leader said.

HDFC vice-chairman and CEO Keki M. Mistry, noted that with low interest rates, stable property prices, higher annual incomes, subsidies and government incentives and stamp duty cuts, affordability factor has improved during the pandemic.


“Genuinely, I think this is the best time to buy a house. Interest rates won’t go any lower, property prices are certainly not going to go any lower. If anything, they will go higher over a period of time. In terms of the various benefits from the government, every possible conceivable benefit has been given, there is a subsidy scheme, CLSS (Credit Linked Subsidy Scheme), interest deduction on housing loans, principal deduction on housing loans. Any which way you look at it, this is the best time to buy a house,” Mistry told Khaleej Times on the sidelines of the ICAI Abu Dhabi Chapter’s 33rd annual international seminar themed: ‘Building Resilience Emerging Stronger’.

Though property prices in major Indian cities have more or less stayed the same, people's income levels have gone up, he noted. Every year, income has increased by at least 7 to 8 per cent.

"So, over the past four years, incomes are up nearly 30 per cent, and property prices are what they were four years ago. So, in terms of the cost of a house as a multiple of the annual income for the customer, that multiple has come down so much, meaning this is the best time in terms of affordability to buy a house," Mistry said.

This "attractive" period of buying has not been seen in the last 20 to 30 years, he added. But over the past 14 months, the growth momentum has increased significantly from the Middle East.

“We have seen growth from the NRI belt, especially the Middle East. Lots of people are buying houses, first, second or third houses in metros. NRIs see a lot of growth potential in India and are investing in houses back in India. Lot of NRIs are buying houses in Mumbai. If you see four years ago and today, the number of demand for Mumbai would be 30-40 per cent higher," he said.

Mistry underlined that against popular perception there isn’t oversupply and with growing demand, the prices can go up.

“There is always a belief that prices would come down. Now that the demand has picked up so much in the last 14 to 15 months, people are realising there isn’t so much oversupply at all. So, for all the people sitting on the sidelines and waiting, they are realising that supply is not that much.

"At some point, who knows, if this demand continues, the prices can actually even start rising, which hasn’t happened in the last 4 years. So, in that sense, this is really the best time to buy a house," he said.

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And with improved affordability, he noted that the demand for housing has picked up all across the country.

“Positively, over the last 14 months or so, we have very clearly seen a sharp increase in the demand for residential housing on a pan-India basis, including the metropolitan cities," he said.

Mistry added that the housing and real estate sector has become structurally stronger over the years.

“In India, a person doesn’t buy a home when they are in their 20s. The average age of a first-time home buyer in India is between 38 and 39 years. With two-third of the population below 35 years of age, over the next three to 10 years, all these younger people will reach an age where they will necessarily buy a house. There will be a structural increase in demand for housing in India over the coming years. I continue to remain optimistic about the future of the housing sector," he said.


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