A recent survey by FICCI and real estate consultancy ANAROCK has revealed that rising home loan interest rates could lead to a significant shift in buyer sentiment. If home loan rates exceed 9%, nearly 90% of potential buyers might rethink their decision to purchase property. The ‘Homebuyer Sentiment Survey,’ conducted with a sample of 7,615 participants, highlights how interest rates are a crucial factor in the home-buying process.
Impact of Rising Interest Rates on Buyer Sentiment
The survey findings indicate that if mortgage rates remain below 8.5%, over 71% of respondents will proceed with their home-buying plans without hesitation. However, if interest rates increase beyond 9%, a substantial 87% of buyers expect their decisions to be affected. In the range of 8.5% to 9%, around 54% of respondents anticipate that they may moderately alter their choices, showing how sensitive the market is to even minor fluctuations in interest rates.
Real Estate Still the Top Investment Choice
Despite the potential impact of rising loan rates, real estate continues to be the most preferred asset class for investment. According to the survey, 59% of participants favor real estate over other types of investments, reinforcing the enduring appeal of property ownership in India. The Indian residential market, dominated by end-users, sees over 67% of buyers purchasing homes for personal use rather than for investment purposes.
Preferred Budget for Home Buyers
When it comes to budget preferences, the survey shows that homes priced between Rs 45-90 lakh are the most popular choice for over 35% of respondents. Meanwhile, around 28% of potential buyers are eyeing properties within the Rs 90 lakh to Rs 1.5 crore range. These price brackets highlight the demand for mid-segment and premium homes in India’s urban real estate markets.
Key Factors for Home Buyers: Timely Delivery and Quality
The survey also underlines the top priorities for home buyers. Timely completion of projects is the number one demand, with 98% of respondents highlighting it as crucial. This is followed by high construction quality, favored by 93% of participants, and well-ventilated homes, which 72% of buyers consider essential.
Regulatory Measures to Boost Investor Confidence
At an event organized by FICCI, SEBI Executive Director Pramod Rao emphasized the importance of regulatory frameworks in maintaining the growth of the real estate sector. According to Rao, investor confidence plays a vital role in the long-term sustainability of the industry. He stressed that SEBI’s focus on transparency and governance has been key to building trust in the market. Stronger compliance and better disclosures are seen as essential steps in attracting institutional investments to the real estate sector.
