The urban middle class are facing a downfall in terms of home ownership in India. This downfall is due to the high interest rates on home loan and high property prices in India being the major hindrances.
According to a survey, more than 50% of the people are not willing to purchase a house for at least six months. The main reasons behind this are high interest rates in India, reluctance to borrow and the scarcity of savings. The other reasons include the inadequate availability of loan and the high property rates in India.
Also, the survey shows that only 32% of people are living in homes that are self-purchased and 38% are still residing with their parents. On the other hand, rented houses comprise 30% of the respondents.
Around the country, more than 50% of the people want to buy affordable homes in metro cities or mini-metro cities with the area of less than 500 square feet. On the other hand, 31% have preferred smaller cities for their affordable homes.
The housing sector of India is being prepared to grow immensely, categorically in the field of affordable housing, owing to the vision of Housing for All by 2022.
Home ownership in India has been low because of one more significant factor that is high amount of tenancy. Tenancy is the highest in small cities comprising 37% of the total. On the other hand, metros and mini-metros comprise 29% and 23% respectively. If we consider the age-group factor, tenancy is at 63% in the 25-44 years age group.
People were facing challenges to obtain a home loan which included no loan history, high rates on home loan and inability to get the required amount.
When people are buying a house, there are many factors that affect their decision. These important factors are extension of loan tenure period, interest rates on home loan and benefits of tax that can easily influence and impact people when buying house.
The group of society which is self-employed is more inclined towards buying a house which results in an increased need for home loans. People consider buying a house as an investment option and that is the main reason for people wanting to buy a house.
When people are planning to buy a house, the average home price was Rs.34 lakh. The highest price is Rs.37 lakh in the metro cities while the lowest is Rs.27 lakh in small cities.