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As we bid farewell to 2024, the Indian real estate market remains highly stable. Continuing the uptrend across segments, among these, luxury homes are outperforming and are facing significant price increases. The housing market's resilience in 2024 has paved the way for an even brighter outlook in 2025. Here's a look at the trends that could shape the real estate market next year.
India's Real Estate in 2024: Strong Foundation for 2025
The housing market in India remains strong in 2024, with strong economic growth and infrastructure advances driving demand. A study by JLL India shows that more than 2,30,000 homes have been sold in top cities. Leading 7 Indian locations between January and September 2024, the value reached Rs 380,000 crore, marking a new sales high with approximately 363.2 million sq ft of salable space during the period, resulting in an optimistic outlook for 2025. Especially the luxury home group which continues to benefit from the growing trend of premium living.
Affordability Improvements in 2025
A major shift in home affordability is expected by 2025. The Reserve Bank of India (RBI) may cut interest rates by 50 basis points, making home ownership more accessible. According to JLL India's Home Affordability Index (HPAI), cities such as Mumbai and Pune are expected to have optimal levels of affordability by 2025. Kolkata is expected to remain a 'home affordability index'. has the most reasonable price With the potential for further improvements.
This positive trend is driven by changes in monetary policy. The RBI's continued neutral stance could lead to a cycle of interest rate cuts. This reduces the financial burden on homebuyers, although Delhi NCR and Bangalore do not see a complete return to maximum affordability. But these areas are getting better every year.
Also Read: India's Housing Market Faces Slowdown, Eyes Budget 2025 for Revival
Rise of Newer Micro-Markets Around Metros
An interesting trend in the Indian real estate market is the rapid growth of suburban areas around major cities. Real estate prices in these emerging micromarkets have increased significantly. For example, Bengaluru's Gunjur area saw a 69% increase in property values between 2019 and 2024, while prime areas like Thannisandra saw a 62% increase in prices as well as impressive growth. in areas such as Noida Expressway in NCR and Panvel in Mumbai.
The rise of these smaller markets is a result of developers focusing on these areas to meet growing demand. With more fertile land and better connectivity. These places therefore have spacious homes with green spaces. Making it an attractive option after the outbreak
Experts Predict Rising Home Prices in 2025
House price trends in 2025 show continued growth. According to a Reuters survey, house prices in India are expected to increase by 6.5% by 2025. The luxury segment in particular is driving much of this growth. And while this price increase may make owning real estate unaffordable for many, especially first-time buyers, It is expected to stimulate demand in the premium housing market.
Experts believe that despite the challenges, strong demand from wealthy individuals will continue to keep prices higher. Especially in the luxury product group but the lack of affordable housing remains a concern. This may discourage middle- and low-income buyers.
Rent or Buy? Making the Right Decision in 2025
As 2025 approaches, many prospective buyers face an important question: Should I buy or rent a home? This decision depends on a number of factors. including budget available finance and long-term goals
Before deciding to buy it is necessary to calculate the total cost of ownership. including stamp duty Registration fee and monthly maintenance costs Home buyers should consider factors such as proximity to the workplace. Transportation options and amenities offered by housing associations.
Renting, on the other hand, offers flexibility and low upfront costs. However, leasing does not create equity. Experts point out that even if homeowners can secure their property, renting may be more suitable in the short term for people who want flexibility and fewer financial obligations.
For those who are considering home ownership It's important to evaluate whether you have enough savings for a down payment. This is generally between 30% and 40% of the property price. If not, renting may be a more prudent option until finances come to mind. Stay in place
Ready-to-Move-In vs. Under-Construction Properties
When buying real estate, buyers will choose between prefabricated homes and projects currently under construction. Prefabricated homes have the advantage of immediate ownership and less uncertainty. However, they require a larger down payment.
On the other hand, properties under construction allow deferment of payments. This can reduce financial stress. Buyers should ensure that the project is at least 80% complete to reduce the risk of delays. Ensuring that the project receives a certificate of occupancy is important to avoid legal issues.
Residential or Commercial Property: What's the Better Investment?
Another important consideration for buyers in 2025 is investing in residential or commercial real estate. Although residential real estate is a safe long-term investment, commercial real estate offers higher rental yields (7-8%) and higher capital appreciation (4-5%), according to experts. Investing in commercial real estate can yield 11-13% returns, compared to 2% rents in the residential market. Low rates of return and capital growth.
However, the decision depends on the buyer's financial goals. Acceptance of risk and investment scope Residential real estate provides stability Commercial real estate, on the other hand, offers higher returns but is more volatile.
Delayed Projects: Should You Invest?
For buyers considering a delayed project but supported by financial mechanisms such as SwamiH, it is important to ensure that construction resumes. and the project is in the process of being completed. These projects may offer opportunities for buyers with limited options. But it is necessary to assess the risks involved.
In the end, whether to rent or buy in 2025 depends on personal preference and economic situation. While buying a home offers long-term benefits such as asset accumulation and tax benefits, it requires a significant upfront investment and ongoing commitment. Renting provides flexibility but lacks the economic benefits of homeownership.
Experts point out that when rental prices rise, Buying a home in 2025 may be a better option for many, especially as interest rates may fall. However, those considering a purchase should evaluate their finances carefully. and choose the property that best suits their long-term goals.
In the ever-changing landscape of the Indian real estate market, 2025 offers both challenges and opportunities. Whether you decide to rent or buy Making sure you have informed decisions will help you make the best choices for your future.
Also Read: DDA Launches 25% Discount Housing Schemes 2025 for Workers & More
Ans 1. The Indian property market is expected to experience steady growth, particularly in the luxury housing sector, with improved affordability for buyers in most cities.
Ans 2. Yes, home prices are expected to rise steadily in 2025, with predictions of a 6.5% increase, mainly driven by demand from wealthy buyers and limited affordable housing.
Ans 3. Affordability is expected to improve in most markets due to anticipated interest rate cuts, except for Delhi NCR and Bengaluru, where it may remain challenging.
Ans 4. Kolkata is predicted to remain the most affordable city, with Mumbai and Pune also approaching optimal affordability levels.
Ans 5. A 50-basis-point interest rate cut could improve affordability, making homeownership more accessible for many buyers.
Ans 6. Peripheral areas around metro cities have seen faster price appreciation and are expected to continue growing in 2025, making them a good investment option.
Ans 7. The decision depends on individual circumstances, but with rising rents and favorable interest rates, many may find buying a home more beneficial than continuing to rent.
Ans 8. Buying a property when interest rates are more favorable or when specific developments in preferred areas offer good value can maximize your investment.
Ans 9. Assess your budget, available finance, total cost of ownership (including stamp duty and maintenance), location, amenities, and proximity to your workplace.
Ans 10. Some delayed projects with resumed construction could offer good investment opportunities, especially if they're backed by reliable funding, but it's essential to do thorough research.