Rent vs Buy: What to Expect in 2024 By: WireDus, January 31, 2024
The surge in rental prices in major Indian cities has reignited the debate over ‘buying or renting’ a home. Individuals residing in urban cities and renting homes often wonder if it’s better to buy or keep exploring rented homes. People have different opinions on buying or renting homes, and this debate has become more intense after the COVID-19 period. Real estate agents, property dealers, and others in the real estate sector promote the benefits of owning a home. However, some think that wanting a home is not truly essential, especially in an uncertain job market. Still, houses are being sold. Housing sales reached a new peak in 2023 in the top seven Indian cities.
In terms of rental values, they continue to rise across the top seven cities post-pandemic. In Q4 2023, the NCR saw a 1% to 2% QoQ increase and a 15% to 20% yearly increase in rental values, led by Gurugram and Noida. The margin between monthly rent and EMI is steadily decreasing. Renting doesn’t contribute to asset creation, whereas owning a home ensures the possession of an asset. Additionally, buying a home built by reputed developers, like ATS Greens, increases in value, especially during uncertain times, and comes with tax benefits through home loans, which are lacking in rental housing.
Millennials, Gen Xers and Gen Zers, drawn by ample financial resources, easily accessible property loans, and the security of owning a tangible asset, are increasingly inclined towards homeownership. Homeownership is now regarded as both a financial decision and a lifestyle choice, influenced by economic stability, evolving work cultures, and wealth creation. In this unfolding story, homeownership signifies both stability and independence.
2023 real estate market summary and 2024 expectations?
In 2023, the Indian residential real estate sector had a phenomenal year, exceeding expectations and setting new records. The positive sentiment in the domestic residential market persisted, despite global challenges, higher home loan interest rates, and escalating housing prices. The residential sector set new records last year and is projected to achieve its highest home sales since 2008, reaching 2,60,000 units, even before accounting for Q4 2023 sales. The total value of homes sold in 2023 exceeded Rs 4.5 lakh crore, marking a 38% increase compared to the entire sales value in 2022.
The growth momentum is expected to persist in 2024, with sales anticipated to surpass the previous year by 10-15%, reaching a record of around 300,000 units. Anticipate the launch of approximately 2,80,000-2,90,000 residential units across India’s top seven cities because of the positive outlook from buyers in the mid and premium segments.
Investment experts are optimistic about the real estate sector
Investment experts consider real estate one of the safer options and suggest buying it as a long-term investment. The sector’s upward trajectory observed in 2023 is anticipated to persist at a remarkable CAGR of 9.2% until 2028. This year is going to be a pivotal year for Indian real estate, promising significant evolution and transformation. Urbanization will continue this year, as will the steady appreciation in prices. It is the best time to make the purchase before prices appreciate further. Home buyers and investors in NCR, Mumbai, Bengaluru, and four other cities will benefit from their purchases, as housing prices are expected to appreciate up to 33 percent within the next three years.
With favourable economic conditions and improving income growth, affordability in 2024 will be second only to the peak levels seen in 2021. This will ensure that buyers can comfortably afford homes, sustaining growth momentum in the residential market over the next year.
Are you inclined to make a property purchase in 2024?
Given the option, it’s recommended to make a property purchase. Property prices have been on the rise, and further appreciation is anticipated. Before deciding to buy a property, it’s recommended to assess your finances. It’s essential to have at least 30 to 40 percent of the required down payment to consider buying a property. If not, it’s advisable to continue renting. Note that banks usually finance up to 80 percent of the total cost.
Keep in mind that homes in well-established areas are generally more expensive than those in recently launched projects. So, if there’s a new area with good infrastructure, like Zeta-1 in Greater Noida, consider investing in a property a few kilometres away from the main city, such as Noida. The right location is the key. Consider investing in ATS Dolce Phase 2, a prime residential property located near lush greenery and conveniently less than ten minutes away from Pari Chowk. The project spans 14 acres of beautifully developed land.
Should you choose a property that’s ready to move in or one that’s still under construction?
If you can pay a significant amount upfront, consider purchasing a ready-to-move-in apartment. In case if you have a tight budget, then think about an upcoming project that is at least 80% complete. The project is unlikely to face significant delays.
Ready-to-move-in residential projects like ATS Dolce Phase 2 are RERA-registered and have occupancy certificates from the authorities. There is a clear and marketable land title and a detailed sales agreement. The checklist of clauses included in the customer agreement is not limited to default implication, defect liability period (five years), payment schedule (construction linked), maintenance clause, holding clause, specifications, amenities, plan layout, floor plan, parking space allotment details, and approvals. The ready-to-move-in ATS Dolce Phase 2 offers the benefits of 24/7 security, lower risk related to delays, and easy accessibility. The residents get to exclusively enjoy the amenities, like the jogging track, swimming pool, gymnasium, kids playground, community club, and daily-need retail shops in the society.
In summary, this year will be about home buying by millennials, Gen Zers, and Gen Xers, given the rising rental prices and a positive real estate market outlook in our country. With increasing home values and favourable economic conditions, individuals are encouraged to consider buying homes as a long-term investment for stability and wealth creation.