Mortgage Rates Over 9% Could Deter Homebuyers, Says Report

The Indian residential market remains primarily driven by end-users, with over 67 per cent of participants purchasing properties for personal use, according to the report

The survey also revealed that real estate is the preferred investment asset class for more than 59 per cent of respondents

Source : PTI

Nearly 90 per cent of respondents believe that their decision to purchase residential properties will be majorly affected if mortgage rates surpass 9 per cent, according to the 'Homebuyer Sentiment Survey,' conducted by FICCI and Anarock and released on Friday.

"In a recent survey, over 71 per cent of respondents indicated that their home-buying decisions would remain unaffected if rates stay below 8.5 per cent. However, if rates exceed 9 per cent, then it will have a significant impact on over 87 per cent of respondents. For rates between 8.5 per cent and 9 per cent, about 54 per cent expect a moderate influence on their choice," the report said.

The survey also revealed that real estate is the preferred investment asset class for more than 59 per cent of respondents. The Indian residential market remains primarily driven by end-users, with over 67 per cent of participants purchasing properties for personal use. 

Additionally, the budget range of Rs 45-90 lakh is the most favoured option for over 35 per cent of prospective homebuyers, while more than 28 per cent prefer homes priced between Rs 90 lakh and Rs 1.5 crore. Key demands among homebuyers include timely project completion (98 per cent), improved construction quality (93 per cent), and well-ventilated living spaces (72 per cent).

Speaking at a FICCI event, Pramod Rao, Executive Director of SEBI, highlighted the critical role of regulatory frameworks in fostering sustainable growth within the real estate sector. "Investor confidence is vital for the industry's long-term success, and SEBI’s focus on transparency and governance has been key in building this trust," Rao said, according to a FICCI statement.

Rao stressed that robust compliance and improved disclosures are essential for attracting institutional investments. He also highlighted SEBI’s initiatives, such as the creation of a single dashboard data bank to streamline processes and efforts to convert real estate investments into tradable financial instruments, thereby enhancing liquidity and accessibility.

“The Indian real estate sector has shown remarkable evolution. The significant shift in consumer preferences away from ready-to-move homes towards under-construction properties indicates growing confidence in developers and the regulatory environment,” said Sandip Somany, Past President, FICCI and Mentor, FICCI Committee on Urban Development and Real Estate, and CMD, Somany Impresa Group.

Anarock Chairman Anuj Puri remarked that the consumer sentiment survey is both timely and crucial. It assesses the preferences of today’s homebuyers in the current market landscape and highlights key trends shaping Indian residential real estate.