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An additional 6.4 crore <keyword id="41366" type="General" weightage="20" keywordseo="homes" source="Orion">homes</keyword> are required by 2036 because of growth in <keyword id="48933" type="General" weightage="20" keywordseo="population" source="Orion">population</keyword>, according to CREDAI-Liases Foras. Realtors' apex body CREDAI, in collaboration with data analytic firm Liases Foras, launched an industry report at the New India Summit held in Varanasi. The additional housing requirement by 2036 due to the population growth is 64 million in India," the joint report said. In 2018, the housing shortage in India was 29 million <keyword id="6362117" type="General" weightage="20" keywordseo="houses" source="Orion">houses</keyword>, it pointed out. "Therefore, the total estimated housing <keyword id="6358993" type="General" weightage="20" keywordseo="demand" source="Orion">demand</keyword> by 2036 in India is 93 million," CREDAI-Liases Foras report said. The report mentioned that it is widely expected that the next wave of <keyword id="6354553" type="General" weightage="20" keywordseo="real-estate" source="Orion">real estate</keyword> growth will stem from Tier II, III regions. Housing demand was strong last year, which also witnessed over 19,050 RERA registrations at Pan-India level with 45 per cent projects falling in the residential segment. Boman Irani, President, CREDAI, said, "The rapidly growing Indian population and economy has resulted in accelerated demand and <keyword id="46639" type="General" weightage="20" keywordseo="supply" source="Orion">supply</keyword> of homes, while also improving home buyers' purchasing power and inclining them to buy bigger houses." Housing in tier II and III cities will witness a sharper trajectory, he said. Manoj Gaur, Chairman, CREDAI, said: "2023 was a remarkable year for all real estate stakeholders and we expect this demand trajectory to sustain in 2024 and beyond." Pankaj Kapoor, Founder and Managing Director, Liases Foras, said, "Indian real estate currently stands at an extremely important junction with sustained demand and supply greatly contributing to the GDP while showcasing a definitive way forward for reaching the USD 5 trillion goal."

Additional 6.4 crore homes required by 2036 because of population growth: CREDAI-Liases Foras

Even though India’s <keyword id="6354553" type="COMPANY" weightage="100" keywordseo="real-estate">real estate</keyword> industry went through a deep slump post <a href="http://www.businessinsider.in/topic/demonetisation">demonetisation</a>, looks like the effects have started to wear off, at least in the top eight cities of the country. As per data from Liases Foras Real Estate Rating &amp; Research, a well-known housing and real estate data agency, primary residential sales across these cities rose 21% in the first quarter of 2017, selling about 61,214 units, up from 50,788 units in the previous quarter. Also read: <a href="http://www.businessinsider.in/India-is-set-to-witness-a-housing-boom-worth-1-3-trillion-and-it-would-CHANGE-the-economy-like-never-before/articleshow/58590215.cms">India is set to witness a housing boom worth $1.3 trillion, and it would CHANGE the economy like never before</a> The leading cities in this road to recovery were <keyword id="6354925" type="COMPANY" weightage="100" keywordseo="Kolkata">Kolkata</keyword>, Hyderabad and Ahmedabad, with respective growth rates of 47%, 43%, and 30%. However, the year-on-year growth was still 5% lower, primarily because of weak market in Chennai and <keyword id="6354321" type="CITY" weightage="100" keywordseo="Bengaluru">Bengaluru</keyword>, with sales falling 44% and 35%, respectively. Also read: <a href="http://www.businessinsider.in/RERA-is-a-game-changer-for-real-estate/articleshow/58629172.cms">RERA is a game changer for real estate</a> Talking of <a href="http://www.businessinsider.in/You-can-buy-a-home-in-Delhi-NCR-withinyour-budget-Heres-how/articleshow/57704483.cms">Delhi NCR</a>, the region contributed the most with sales of 14,983 units, after which <keyword id="6361772" type="ORGANIZATION" weightage="100" keywordseo="Mumbai-Metropolitan-Region">Mumbai Metropolitan Region</keyword> ranked second with 14,505 units, registering respective growth rates of 24.5% and 23.6%. "The impact of <keyword id="3315394" type="UNKNOWN" weightage="100" keywordseo="demonetisation">demonetisation</keyword> was transitory as it did result in subdued disbursement growth, particularly in the third quarter and part of the fourth quarter of the financial year under review. But by the end of the financial year, the individual disbursement growth trajectory began normalising," said <keyword id="6419588" type="PERSON" weightage="100" keywordseo="Keki-Mistry">Keki Mistry</keyword>, CEO of HDFC. Also read: <a href="http://www.businessinsider.in/Remonetisation-substantially-completed-will-expand-tax-base-Jaitley/articleshow/58576226.cms">Remonetisation substantially completed, will expand tax base: Jaitley</a> He added that even though the market has just bounced back to normal, this is be the best time to buy residential properties because of lower interest rates, declining property prices in some cities and government incentives.

India's top eight cities saw 21% surge in home sales in last quarter

India is standing at the edge of a potential housing boom, which as per <keyword id="6397676" type="CITY" weightage="100" keywordseo="CLSA">CLSA</keyword> India estimates, could reach up to $1.3 trillion in the next seven years. The country’s growing middle class is demanding better housing, and is better efficient than ever when it comes to the means to achieve this dream. India has always been extreme in its housing approach, with sprawling slums at one end and enormous mansions at the other. However, the gap can be filled now, since CLSA analysts think that the country might make good use of a broad acceleration in residential construction in the $2 trillion economy. "The last decade was about price appreciation," Pankaj Kapoor, founder of Mumbai-based <keyword id="1086661" type="UNKNOWN" weightage="100" keywordseo="Liases-Foras-Real-Estate-Rating-Research">Liases Foras Real Estate Rating &amp; Research</keyword> told <a href="https://www.bloomberg.com/politics/articles/2017-06-05/from-tenement-to-township-india-s-1-3-trillion-housing-push">Bloomberg</a>. "This decade will be about volume growth," he adds. It was in November last year when PM Modi played the demonetisation card to control corruption and black money, a move that impacted the Indian <keyword id="6354553" type="COMPANY" weightage="100" keywordseo="real-estate">real estate</keyword> hard. However, the industry seems to be in the mood of recovery, with housing sales growing 19% across nine cities in the March quarter, says data from PropTiger.com. The population factor plays its role too, with about 69% of the country's 1.3 billion people being in prime age of house buying, i.e., between 20 to 40 years. This is more than any other nation, says a Bloomberg Intelligence report from April. Similarly, CLSA's note dated May says that the per capita income has also grown at a compound annual growth rate of 10% for the past five years, which means that an average Indian can get a house in this boom. However, when it comes to having the adequate number of houses to home this middle class, we lag behind. With more and more people migrating to urban areas, the infrastructure has weighed down, land costs have gone up, and eventually, there is a shortage of houses. However, Prime Minister <keyword id="6354477" type="PERSON" weightage="100" keywordseo="Narendra-Modi">Narendra Modi</keyword>’s "<keyword id="2481158" type="UNKNOWN" weightage="100" keywordseo="Housing-for-All">Housing for All</keyword>" programme, which was launched in June 2015 comes as a saving grace. The programme aims to build 20 million urban homes and 30 million rural houses by 2022, making property the most affordable in two decades. The programme, unfortunately, remains marred because of several hurdles. There's still "a big question mark" over whether the government's housing plan is "realistic and implementable," says <keyword id="6420759" type="PERSON" weightage="100" keywordseo="Anuj-Puri">Anuj Puri</keyword>, chairman of real-estate services at JLL Residential. "It seems impossible if enough land is not released for the creation of affordable housing. Land is a very price-sensitive commodity, and its current shortage in major city-centric areas prevents the development of affordable housing in areas where it is most direly needed." Even with these challenges, the government has started to view housing as an "economic enabler," said <keyword id="167433" type="PERSON" weightage="100" keywordseo="Abhishek-Lodha">Abhishek Lodha</keyword>, MD of <keyword id="46877" type="COMPANY" weightage="100" keywordseo="Lodha-group">Lodha Group</keyword>, one of India's biggest property developers. "The government has started recognizing that for the middle class to start creating wealth for themselves they have to participate in housing, just like any democracy," he adds. Banks are not far behind when it comes to the race to get a piece of the action. The country has seen more than 16 mortgage financiers commencing work in the two years to last June, with banks offering housing loans as a way to boost capital and offset commercial loans that it’s burnt hands with in form of mounting bad debts. CLSA expects that India would see 60 million new homes between 2018 and 2024, with a 70% rise in social and affordable housing. The propagated dream of the PM, to give every Indian a home, might eventually come true sometime in the future. (Image source Mom Constructions)

A sneak peak into Indian middle class’s $1.3 trillion housing push

Off lately, there has been uproar in the <keyword id="1412996" type="UNKNOWN" weightage="100" keywordseo="Indian-real-estate-market">Indian real estate market</keyword> about property builders being criticised for not delivering their projects on time, and several home buyers have taken the <a href="http://www.businessinsider.in/Home-buyers-fighting-fraud-builders-in-courts/articleshow/50575376.cms">legal route</a> to handle such builders. 
 In one such case, the National Consumer Disputes Redressal Commission (<keyword id="103254" type="ORGANIZATION" weightage="100" keywordseo="NCDRC">NCDRC</keyword>) has passed a landmark judgement and imposed a penalty of 12% per annum on <keyword id="45043" type="COMPANY" weightage="100" keywordseo="Jaypee-Group">Jaypee Group</keyword>. The penalty has been imposed because the Noida-based builder delayed the possession of homes to buyers in the <keyword id="3355694" type="UNKNOWN" weightage="100" keywordseo="Kalypso-Court-project">Kalypso Court project</keyword>, located on the Noida-Greater Noida expressway. 
 
The order dated May 2 has also directed Jaypee Group to hand over the possession of apartments to buyers by July 21, and if it fails to do so, a further penalty of Rs 5,000 per flat per day will be imposed until the completion of the project. 
 
Also read: <a href="http://www.businessinsider.in/Delayed-deliveries-from-builders-can-mean-tax-loss-of-lakhs/articleshow/50652618.cms">Delayed deliveries from builders could cost you lakhs in tax losses</a> 
 
Not only this, the builder has also been directed to provide adequate parking space in the project and refund the excess amount that was collected from customers for parking slots, and that too with 12% interest per annum from the date of the charge. For this, the commission has cited the reason that builders are not supposed to charge buyers on increase in super area of an apartment after construction without prior consent from the buyer. 
 
As per property research firm Liases Foras, more than half of the real estate projects in India have been delayed by more than a year, and about 25% of them are delayed by over 36 months. 
 
Talking of the project, it was launched in 2007 and was supposed to have 16 towers, with a deadline of the year 2011. However, even five years later, most of the towers have not been completed, and only five towers have been allotted to buyers. 
 
Also read: <a href="http://www.businessinsider.in/These-four-cities-offer-the-best-luxury-homes-to-home-buyers/articleshow/51998476.cms">These four cities offer the best luxury homes to home buyers</a> 
 
It was last year that another builder <a href="http://www.businessinsider.in/Once-bitten-twice-shy-Realty-developers-learn-from-Unitech-case-to-be-more-realistic-now/articleshow/50589445.cms">Unitech</a> was asked to pay 12% penalty to homebuyers in the Unitech Vistas project located in <a href="http://www.businessinsider.in/Can-Gurgaons-property-market-really-pick-up/articleshow/50483172.cms">Gurgaon</a>, but the order got a stay by the Supreme Court later. 
 
<a href="http://www.magicbricks.com/mbphoto/property/cropped_images/2015/Aug/27/Photo_h600_w900/17576807_8_Project-Photo-38-The-Kalypso-Court-Noida-5021510_480_1366_600_900.jpg">Image source</a>

Jaypee group fined with 12% annual penalty in Noida’s Kalypso Court project

While property scene in India remains stagnant, it was the sale of homes across the top eight cities of India that improved 7% year-on-year in the last quarter of 2015. Sales also rose 15% on a quarter-on-quarter basis, and discounts by builders during the festive season can be claimed as one of the main reasons, as cited by a report from Liases Foras, the property research firm. 
 
While Mumbai and NCR markets saw an average price drop of 2% y-o-y, Bengaluru residents saw an increase of 6%. In most other markets, prices either dropped or rose marginally. 
 
It was the metropolitan region of Mumbai that saw the best sales, growing 35% y-o-y, while in the NCR market, sales were up 8% and in Bengaluru, by 11%. Pune on the other hand saw sales dropping 18% y-o-y. 
 
As per the report, an aggregate of 78 million sq ft of home space was sold across the top eight cities of the country, as compared to 72.9 million sq ft last year. 
 
"It is a buyers' market today. Geographies, which were predominantly investor driven, are still suffering while areas which were inhabited and more suited to end-users are seeing improvement in sales," Pankaj Kapoor, managing director of Liases Foras, told ET. "Now the gap between affordability and pricing is reducing." 
 
<a href="http://cdn.patch.com/users/231734/2015/12/T800x600/2015125671fb5c884e2.jpg">Image source</a>

Top eight Indian cities see home sales improving by 7% in last quarter of 2015

<ul><li>Myth 1: India’s household savings are strong enough.</li><li>Myth 2: Indians factor in inflation while choosing investments.</li><li>Myth 3: Further interest rate cuts will spur consumption and savings.</li></ul>The biggest myth of all myths in India is that a person may decide to buy a home or a car just because the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) has cut interest rates by 25 basis points or 50 basis points. The fact is a person buys any discretionary item like a home or a car only when he or she has enough savings, borrowing capacity, and reasonable certainty about the future. Right now, Indian households are running short of all three as visible in the <a href="https://www.businessinsider.in/job-cuts-at-parle-and-britannia-sales-show-indian-economy-is-in-dire-straits/articleshow/70766429.cms">slowing sales of homes, cars, and even items of daily use</a>. Amidst rampant unemployment and slow wage growth, people are eating into their savings and this is dangerous. Slowdown in consumption has been sharper in the last nine months despite <a href="https://www.businessinsider.in/rbi-cut-interest-rates-by-35-basis-points-as-growth-sputters-and-inflation-cools/articleshow/70565859.cms">four interest rate cuts by the RBI</a>, though much of it has not been passed on by the banks. If monetary stimulus was enough, there would be signs of improvement in the economy or the sentiment but there aren’t any. 
	
	
	
	
	
	
	
	
	
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 On the contrary, lending rates are coming down and so are deposit rates-- and that hurts households directly. Therefore, another interest rate cut may not be the answer to rev up the sluggish economy and household consumption. The calls for further interest rate cuts are based on certain myths. Myth 1: India’s household savings are strong enough It has been true for decades that Indian households have saved for a rainy day and it is often these savings have been a shield during dire economic crises in the past. However, that is changing for many reasons. “As investment depends crucially on a low cost of capital, reducing real interest rates need not necessarily lower savings when the demographics are favourable,” the 2019 annual economic survey argued. However, India’s household deposits in banks have declined to their lowest level in over a decade as the interest rate offered by banks declined in recent years. Household savings as a percentage of GDP has <a href="https://economictimes.indiatimes.com/markets/stocks/news/fall-in-household-savings-leads-decline-in-net-financial-savings/articleshow/71058730.cms">fallen to 17.2% at the end of March 2019</a>. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Meanwhile, in the two years ending June 2019, personal loans and credit card debts <a href="http://www.forbesindia.com/article/leaderboard/profitability-improves-for-banks-but-deeper-concerns-remain/54783/1">have increased by over 58%</a>, according to RBI data analysed by Forbes. People are either borrowing money or dipping into their savings for sustenance. 
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
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 So, as savings depleted and loans piled on, investments have gone down. Unsold homes have increased 7% to 1.3 million units at the end of June 2019, according to an independent real estate research firm Liases Foras. However, gold prices hit <a href="https://www.businessinsider.in/10-grams-of-gold-now-costs-40000/articleshow/70838768.cms">a whopping ₹40,000 an ounce</a> last month. And that brings us to the second myth. Myth 2: Indians factor in inflation while choosing investments. In theory, demand for gold should go down when inflation is low. And price rise in India has been low for over three years. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 But gold is an essential part of Indian culture and tradition and even when there is a fall in demand for gold, it is relatively low. The Narendra Modi government has tried to push people away from gold and to invest in more risky financial instruments like the share market and real estate. But as of March 2018, only 8% of household savings are in equity-- though a significant jump from 3% in FY16-- according to RBI data. While the diversification can be celebrated, the market carnage in the last one year has not only dented the confidence of the small investors, it has also made them poorer. Nearly a quarter of all households in India prefer bank deposits, according to an RBI report in July 2017. The pecking order of preference is children, own business, and bank deposits. Only a small fraction of all Indian families save in pension funds, or mutual funds. 
	
	
	
	
	
	
	
	
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 Very few Indians calculate adjust for inflation before investing or even while evaluating salary hikes. For example, the sentiment triggered by a 10% rise in salary is more or less the same irrespective of whether the inflation rate is 4% or 10%, even though prices have a direct impact on the savings. 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 A recent research by Motilal Oswal has showed that people invested less in bank deposits because the headline interest rate fell even though they may have yielded more when adjusted for inflation. "Pushing up household savings would require more efforts towards financial inclusion and possibly, incentives,” ratings agency Crisil said in a July 2019 report. As established earlier, that monetary stimulus like interest rate cuts have limited impact as an incentive. Myth 3: Interest rate cuts will spur consumption and savings Real investments, measured by gross fixed capital formation (GFCF), in the economy grew at an average of 9.2% in the last three years, at twice the rate compared to the preceding five, which included two of the infamous ‘policy paralysis’ period under the Congress-led United Progressive Alliance (UPA) regime when inflation was at scorchingly high level. However, digging deeper into the data, Motilal Oswal found that in the last three years, corporate investments grew over 7% every year compared to 12% in government investment and a measly 2% growth in household investments. This, at a time when inflation was low and interest rates were falling. The mood is sombre in most Indian homes The reality right now in India is that people are earning less and therefore the benefits of low inflation have not reached them. Small investors have lost money in the stock market. They are either borrowing more or eating into their savings for sustenance. Any further cut in deposit rates will make consumer more cautious because for most Indian families, it’s cash--whether it is at home or in the bank-- that counts. Investments, including buying a home or a car, depends on the near-term cash savings and near-term outlook on earnings. As most families are still reliant on bank deposits either for income or for a rainy day or retirement, any further cut in deposit rates will further affect savings and sentiment, and therefore consumption. The onus should now be on the government to revive investor sentiment via policy stimulus adding to <a href="https://www.businessinsider.in/nirmala-sitharam-address-on-india-economic-stimulus-live-updates-and-highlights/articleshow/70804926.cms" data-type="tilCustomLink" target="_blank">the ones Finance Minister Nirmala Sitharaman announced in late August</a>. As the renowned economist and former RBI governor Raghuram Rajan wrote in his book ‘Fault Lines: How Hidden Fractures Still Threaten The World Economy’, “the more a country finances its investment through its own domestic savings, the faster it grows. Conversely, the more foreign financing it uses, the more slowly it grows.” SEE ALSO: <a href="https://www.businessinsider.in/narendra-modi-pmeac-comments-on-indias-economic-slowdown/articleshow/70954078.cms" data-type="tilCustomLink" target="_blank">Here’s what Narendra Modi’s closest advisors have been saying about economic slowdown</a> <a href="https://www.businessinsider.in/recession-in-india-searches-spike-as-gdp-growth-hits-a-six-year-low/articleshow/70922461.cms" data-type="tilCustomLink" target="_blank">Indians were fearing recession even before data showed that GDP growth hit a six-year low</a>

Family savings in India face the threat of more interest rate cuts

<ul><li>Estimates vary widely on both residential <keyword id="6354553" type="COMPANY" weightage="20" keywordseo="real-estate">real estate</keyword> sales and new housing project launches.</li><li>Unsold inventory in major cities continues to be a grave problem. </li><li><keyword id="136927" type="ORGANIZATION" weightage="20" keywordseo="affordable-housing">Affordable housing</keyword> is an attractive area for developers big and small.</li></ul> <keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword>’s <keyword id="189423" type="PERSON" weightage="20" keywordseo="housing-market">housing market</keyword> remains a mixed bag with no clear answers about when the sector could make a firm turnaround after a prolonged slump exacerbated by sweeping regulatory changes in the past two years. Estimates vary widely on both residential real estate sales and new housing project launches when it comes to how they have fared this year as compared to a year ago. According to, property <a href="https://content.knightfrank.com/research/659/documents/en/india-real-estate-january-june-2018-5716.pdf">consultancy</a> <keyword id="6363605" type="COMPANY" weightage="20" keywordseo="knight-frank">Knight Frank</keyword>, real estate sales were, more or less, flat in the first half of this year compared to the same period last year despite a drop in home prices. Another report by real estate group CREDAI and JLL, a real estate consultancy said that housing sales in top seven cities in India in fact grew by 25 per cent in that same period. In terms of new housing project launches, according to <a href="https://www.livemint.com/Home-Page/QafqRmHCZt49bKmuwCwQMM/New-real-estate-launches-this-year-to-lift-investor-sentimen.html">data </a>from property consultancy Anarock Property Consultants, the number of new launches across seven key cities have gone up by 10% in the first half of 2018 as compared to last year. But on the other hand, <a href="https://content.knightfrank.com/research/659/documents/en/india-real-estate-january-june-2018-5716.pdf">data </a>from Knight Frank shows that the first half of this year saw a net rise of 46% in new launches at 91,739 housing units as compared to the same period a year ago. The quarterly picture, meanwhile, was much more worrying according to the Centre for Monitoring Indian Economy, saying that new project launches had actually dropped by 60% in the most recent quarter compared to last year. Real estate see-saw The housing market in India has been in a slump because of a combination of factors. For starters, the mismatch between buyer and seller price expectations has led to a massive backlog of unsold inventory of housing units. But even before the houses hit the market there are usually delays in project execution and litigation on land disputes, among other things. The introduction of regulatory changes such as the new real estate law RERA, intended to protect home buyers and bring transparency, along with the government’s demonetisation exercise and introduction of the Goods and Services Tax, pushed many large developers into a wait-and-watch mode, industry experts point out. The elephant in the room Despite the recent positive sentiment behind the launch of new <keyword id="6385126" type="UNKNOWN" weightage="20" keywordseo="housing-projects">housing projects</keyword>, the massive backlog of unsold inventory, continues to be a grave problem in major cities. Nearly 576,000 housing units worth ₹4.9 trillion ($70 billion) are behind schedule in seven key cities, <a href="https://www.moneycontrol.com/news/india/housing-units-worth-rs-4-64-lakh-crore-delayed-in-7-top-cities-despite-rera-implementation-anarock-2884421.html">according</a> to Anarock. One indicator of the health of the unsold inventory problem is a measure called QTS - quarters to sale - which roughly measures how many quarters it would take to sell the inventory. In 2018, the QTS has improved only slightly to 10 quarters as at the end of March from 14 quarters compared to the previous year, according to a report by ICRA. Subdued demand and the price mismatch for upscale housing projects continue to be sticky factors. "Despite increased launches, reduced price, government reforms and incentive, housing demand is yet to take off," Knight Frank India Executive Director (North) Mudassir Zaidi was <a href="https://economictimes.indiatimes.com/wealth/real-estate/housing-sales-up-3-in-h1-in-top-8-cities-launches-up-46-knight-frank/articleshow/65132989.cms?utm_source=contentofinterest&amp;utm_medium=text&amp;utm_campaign=cppst">reported</a> as saying last month. Affordable housing - a glimmer of hope Following the government’s push into making housing more affordable and a host of government schemes including incentives, many new real estate launches are now being seen. According to property consultancy <a href="https://www.moneycontrol.com/news/business/real-estate/affordable-homes-now-account-for-over-20-of-all-properties-sold-in-india-2852131.html">Liases Foras</a>, affordable homes now make up nearly 20% of residential property sales compared to 8% in FY2016. On average, these houses in the affordable segment are typically priced at an average of ₹2.5 million. Some large and smaller developers, who are in the midst of planning new launches, are <a href="https://www.livemint.com/Home-Page/QafqRmHCZt49bKmuwCwQMM/New-real-estate-launches-this-year-to-lift-investor-sentimen.html">reportedly </a>keen on affordable housing because of the expected boom in the space. While some developers are holding out hope for a strong comeback only next year. “We may see nearly 15-18% increase in the number of new launches in H1 2019, which could be anywhere between 96,000 units to approx. 98,600 units,” Anarock <a href="https://www.livemint.com/Home-Page/QafqRmHCZt49bKmuwCwQMM/New-real-estate-launches-this-year-to-lift-investor-sentimen.html">said </a>in its report. With housing prices also going through a correction, home buyers could end up winners in the market in the long-term.

No one quite knows where India’s housing market is headed

There has been an increase in home buying plans in the past 12 months in the country, according to the new home index of <keyword id="1871011" type="UNKNOWN" weightage="80" keywordseo="ZyFin-Research">Zyfin research</keyword>. Despite this surge, <keyword id="6354553" type="COMPANY" weightage="80" keywordseo="real-estate">real estate</keyword> is not a good option for investment in most parts of the country, reported the Economic Times. Property price are still very high and despite the recent <keyword id="37018" type="UNKNOWN" weightage="60" keywordseo="interest-rate">interest rate</keyword> cuts, the cost of borrowing has not come down significantly. For potential borrowers, a 15 basis point will shave off Rs 800 from the <keyword id="6357050" type="COMPANY" weightage="80" keywordseo="EMI">EMI</keyword> of a Rs 80 lakh loan for 20 years. Is that a big reason for them to make the largest financial commitment of their life? 

	The financial daily has raised 10 questions that a potential buyer needs to answer before he takes the plunge. Don't get us wrong. We don't want to shatter your dreams to own a house. We just want you to take a reality check. If most of the questions are answered in a 'no', take a step back and revisit your plans. 

	 1) Can you afford the <keyword id="6354730" type="UNKNOWN" weightage="80" keywordseo="Home-loan">home loan</keyword> EMI? 
	 
	It might sound a no-brainer, but many home buyers get this wrong and bite off more than they can chew. The home loan EMI should be around 40% of your net household income. But that is if you don't have other loans. A high EMI outgo can put your household budget under pressure. 
	 
	2) Have you factored in the other costs? 
	 
	Like many other products, a house also has ancillary costs that need to be paid for. The price advertised in the media is usually the base price of the property. The add-ons are usually kept hidden till you sit down with your cheque book. Many builders will slip in charges for facilities that you thought were free with the property. 
	 
	3) Have you done a thorough rent versus buy analysis? 
	 The old saying that "fools build houses and wise men live in them" has been proved incorrect several times in the past. But the high <keyword id="35507" type="UNKNOWN" weightage="80" keywordseo="property-prices">property prices</keyword> across cities mean that renting is certainly a better option now. 
	 
	4) Will the value of the property rise faster than the interest on loan? 
	 
	In the early 2000s, when home loans were available at 6-7% and property prices were galloping at 20-25%, it made eminent sense to invest in an upcoming apartment project. You could book two properties and sell one of them after a few years for a profit big enough to repay the entire loan taken for the first property. Those days are now history. Property prices are now appreciating at a slower pace. In some markets, such as Noida and Greater Noida in the National Capital Region, prices have even come down in the past 12-18 months. 
	 
	5) Will this purchase force you to postpone other major goals? 
	 
	Stagnant property prices and high EMIs are not the only problems that potential home buyers should be wary of. Their home buying plans can have serious implications on other financial goals, such as saving for their children's education and marriage and their retirement. 
	 
	6) Do you have a contingency fund? 
	 
	Real estate is not a liquid investment. You can't sell it at short notice, nor break it up into parts. Invest in it only if you do not need that money at short notice. This also means one must have an emergency fund to take care of 3-6 months' expenses. If you plan to use your emergency funds to pay the downpayment, you could be making a big mistake. A financial emergency can put you in a terrible spot, with the home loan EMI exacerbating the problem. 
	 
	7) Will you live there for 10-15 years? 
	 
	We live in a society that assigns great importance to physical assets. Owning a home is seen as a sign of achievement and stability. However, buying a house too early in your career can hamper your prospects. 
	 
	8) Will you be able to earn decent rent from your house? 
	 
	Many investors in property are looking for two streams of income: capital gains from the rise in its value and rental income from the property. But don't get carried away when you calculate the potential rental income from your property. Many investors think that the future rental income will be enough to pay their EMIs. However, the rental yields (the annual rent received from the property as a percentage of the value) are very low in Indian cities. 
	 
	9) What if your income stops? 
	 
	We have covered this aspect earlier but this is different from a short-term contingency plan. The Job Security index of ZyFin Research has steadily climbed in the past 12 months. But have you factored in the possibility of something untoward happening to you? Is your family prepared for the worst? 
	 
	10) Will the builder deliver in time so that you don't lose tax benefits? 
	 
	Delayed projects are no longer news. According to PropEquity, the average delay in the Mumbai Metropolitan Region is 25 months. In the worst hit Delhi NCR region, it is 33 months. Delays can be particularly debilitating if the buyer had expected EMIs to replace the monthly rent payment. If the project gets delayed, they have to fork out money for both. Even those who buy property purely as an investment are hit. They are paying EMIs but there is no sign of rental income. 
	 
	(Image: Indiatimes)

Answer these 10 questions before you buy a house

A report from the commercial data information and analytics firm Propstack has said that India’s top seven markets absorbed considerable <keyword id="35279" type="UNKNOWN" weightage="100" keywordseo="commercial-real-estate">commercial real estate</keyword> with both outright purchases and leasing of office space. This has upped the commercial real estate to 5.8 million square feet during the Q1 of 2016, seeing a rise of 8% from a year ago. 
 
Last year, renewed corporate confidence amid steady economic growth brightened the scene of commercial real estate. The trend has continued this year as well, indicating economy's health and scope of job creation. 
 
The quarter saw commercial real estate transactions going up 23%, with demands being led by companies in BFSI (banking, financial service and insurance), e-commerce and IT/ITeS sectors. 
 
It also saw some significant deals, including those of WNS in Mumbai, UBS at Pune, ADP in Hyderabad and Genpact in Gurgaon. 
 
"If the current momentum continues, 2016 could well be a record year for office space absorption in India. Commercial real estate is clearly reflecting the mood on business front and based on the pipeline for office space demand we are heading towards registering a strong year," Seetharaman said. 
 
The top seven markets include Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai, Hyderabad and Kolkata. 
 
As per the Propstack report, most of these cities showed a steady growth in rents in the quarter that went by, except Kolkata. Talking in exact figures, Pune led the pack with 6.9% rise, followed by Bengaluru’s 5.7% and Delhi-NCR’s 2.8% growth. While Chennai and Mumbai saw marginal rises of 2.6% and 1.2%, Hyderabad saw a rise of 1.4%. 
 
<a href="http://www.skninfra.com/library/data/projects/EmaarMGF-Emerald-Plaza/renders/project.jpg">Image source</a>

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