In a revealing snapshot of India's real estate market, a recent survey by realty consultant Anarock has uncovered widespread concern among prospective homebuyers regarding the steep rise in residential property prices. The comprehensive study, which gathered insights from nearly 8,250 participants, paints a picture of a market where affordability is increasingly becoming a challenge for many.

Survey Highlights

The survey results show an overwhelming majority of potential homebuyers expressing various levels of concern:

• 47% are 'very concerned' about recent housing price increases
• 24% are 'moderately concerned'
• 12% are 'slightly concerned'
• 10% are 'extremely concerned'
• 7% expressed no concern

These figures collectively indicate that 93% of prospective homebuyers are apprehensive about the current trend in property prices.

Price Surge Impact

The concern is not unfounded, as the survey reveals a dramatic increase in average residential prices:

This represents a staggering increase of 49.81% in just two years, significantly altering the real estate landscape and buyers' purchasing power.

Buying Decisions Affected

The sharp rise in prices has had a tangible impact on buying decisions:

• 21% of potential buyers plan to proceed with their purchase as scheduled
• 71% are facing delays in their buying plans
• 6% have decided to cancel their purchase altogether

Reasons for Hesitation

The survey delved into the primary reasons behind the hesitation in property purchases:

1. Affordability Issues: 41% of respondents cited this as their main concern
2. Fewer Options Within Budget: 35% mentioned this as a significant factor

These findings underscore the growing mismatch between property prices and buyer budgets, potentially signaling a need for market adjustments or policy interventions to address affordability concerns.

Market Implications

The survey results suggest a potential slowdown in the real estate market if the trend continues. With a majority of prospective buyers either delaying or cancelling their purchases, developers and policymakers may need to reassess strategies to maintain market momentum.

For buyers, the current scenario presents a challenging landscape where careful financial planning and thorough market research become even more crucial before making a property investment decision.

As the real estate sector grapples with these affordability challenges, all eyes will be on how the market responds to these consumer sentiments in the coming months. Whether through price corrections, increased supply in affordable segments, or innovative financing options, addressing these concerns will be key to sustaining the health of India's real estate market.

In a significant move that could provide a substantial boost to India's real estate and construction sectors, the government has announced major reductions in Goods and Services Tax (GST) rates for key building materials. These cuts, decided during the 56th GST council meeting, are expected to lower construction costs for both developers and homebuyers.

Cement GST Slashed

The most notable change is the reduction of GST on cement from 28% to 18%. This 10 percentage point cut is particularly impactful given India's position as the world's second-largest consumer and producer of cement. The reduction is anticipated to have a cascading effect on overall construction costs.

Other Construction Materials See Tax Cuts

The GST council didn't stop at cement. Several other essential construction materials also saw significant tax reductions:

These materials constitute a substantial portion of construction expenses, and the tax cuts are expected to translate into noticeable cost savings for real estate projects.

Industry Reaction

Niranjan Hiranandani, chairman of NAREDCO National, welcomed the move, stating that the GST rationalization could have far-reaching positive effects. He suggested that these tax cuts could:

• Enhance purchasing power
• Stimulate consumption
• Help contain inflation
• Potentially propel India's GDP growth beyond 8%

Implications for the Real Estate Sector

The reduction in GST rates is expected to have several positive implications for the real estate sector:

1. Lower Construction Costs: Developers are likely to benefit from reduced input costs, which could potentially be passed on to homebuyers.

2. Increased Affordability: The tax cuts may make housing more affordable, potentially stimulating demand in the real estate market.

3. Boost to Infrastructure Projects: Lower costs for key materials could accelerate infrastructure development projects.

4. Support for 'Housing for All': The move aligns with the government's objective of providing affordable housing to all citizens.

5. Potential for Economic Growth: As suggested by industry leaders, the stimulation of the construction sector could have positive ripple effects on overall economic growth.

The real estate and construction sectors in India have been facing challenges due to rising input costs. These GST reductions are seen as a timely intervention that could provide the necessary impetus for growth and development in these crucial sectors of the Indian economy.