Forty-seven per cent of prospective home buyers believe home prices to increase beyond their affordable range due to rising interest rates and property prices, a survey finds.
The study conducted by real estate marketplace NoBroker revealed that Bengaluru and Mumbai have higher percentages of non-buyers at 64 per cent and 57 per cent, respectively.
Some 26,000 people from Bengaluru, Mumbai, Pune, Chennai, Hyderabad, and the Delhi-National Capital Region, participated in the survey.
However, the report said, "Riding high on the explosion in consumer demand after the pandemic, the sector shrugged off the inertia of the past few years to register stellar growth on the back of several overlapping factors."
The average price per square foot climbed by 7 per cent in Bengaluru, 3.5 per cent in Mumbai, and 4 per cent in Delhi-NCR over the past five years.
At least 21 per cent of those polled thought real estate prices increased, and 17 per cent said they put off buying a home because of rising interest rates.
The research showed the price jump was greater for houses worth above Rs 1 crore. However, homes costing more than Rs 2.5 crore increased even more quickly.
NoBroker also found that despite rising house loan rates and higher home loan and property prices, homebuyers' sentiment remained positive.
"This can be the case since a higher loan-to-value ratio means the ability to purchase a property with higher ticket value," the survey added.
According to the poll, 38 percent of respondents listed security as a primary motivation for owning a physical asset or real estate last year.
Rapid urban development has caused a 2 percent increase in migration to city centres compared to the previous year. However, barring Mumbai and Pune, less than 30 per cent of people surveyed were eager to purchase a home in the suburbs.
Sixty-seven per cent of respondents indicated the construction quality of a building was important in narrowing down a property.
More homebuyers are now checking for regulatory compliances before buying a home in Indian cities. About 51 per cent of people in Bengaluru, 59 per cent in Mumbai, and 50 per cent in Delhi-NCR looked at the regulatory status before owning a physical asset.
However, the biggest percentage of respondents (17 per cent) in Delhi-NCR, among all other housing markets, claimed regulatory restrictions had not increased their confidence in purchasing a home.