The residential property market in India is a major sector of interest for both domestic and international investors. Experts have diverse opinions based on market trends, economic factors, and evolving consumer preferences. Here’s a breakdown of expert views on investing in residential properties in India:
1. Stable Long-Term Investment
Residential properties in India have traditionally been viewed as a safe and stable investment option. Given the country’s population growth, urbanization, and increasing middle-class income, demand for housing is expected to remain strong in the long run. Experts see real estate as a solid asset class, especially for those looking for long-term capital appreciation.
Expert Opinion:
“Residential property remains one of the safest investments in India, particularly in the context of rising urbanization. The demand for housing, especially affordable housing, will continue to grow, providing investors with long-term capital gains.”
- Anuj Puri, Chairman, Anarock Property Consultants
2. Urbanization and Growing Middle-Class Demand
India’s rapid urbanization and growing middle class are key drivers of residential property demand. Many experts believe that with millions of people migrating to cities for better job prospects and lifestyles, the demand for residential properties in urban centers, particularly in Tier 1 and Tier 2 cities, will continue to grow.
Expert Opinion:
“Urbanization is a key factor pushing residential real estate demand in cities like Bengaluru, Pune, and Hyderabad. The growing middle class is increasingly investing in homes, both for personal use and as a means of wealth creation.”
- Ramesh Nair, CEO, JLL India
3. Emerging Trends in Affordable Housing
Affordable housing has become a prominent sector within India’s real estate market. The government’s push through schemes such as Pradhan Mantri Awas Yojana (PMAY) and tax incentives for developers have made affordable housing more attractive for investors. Experts suggest that affordable housing is likely to see sustained demand, especially in the coming decades.
Expert Opinion:
“Affordable housing has become a hot spot for investors, with favorable government policies and strong demand from first-time homebuyers. As India’s middle-income population grows, investing in affordable housing can yield attractive returns.”
- Vishal Gupta, Head of Research, CBRE India
4. Impact of COVID-19 and Shift in Preferences
The COVID-19 pandemic has influenced the way people view residential properties. With remote working becoming more common, there’s been a shift toward suburban and smaller city properties that offer more space at a lower cost compared to congested urban centers. Experts believe that this trend could lead to increased demand for larger homes in less crowded locations.
Expert Opinion:
“The pandemic has shifted the focus toward spacious homes on the periphery of major cities, especially as work-from-home culture persists. Buyers are looking for homes with more amenities, green spaces, and room for home offices.”
- Kamal Khetan, Chairman & Managing Director, Sunteck Realty
5. Regulatory and Legal Framework: RERA Impact
Experts also highlight the importance of regulatory changes, such as the Real Estate (Regulation and Development) Act (RERA), which has aimed to bring transparency and accountability to the real estate sector. With these regulations in place, investors feel more secure about their investments, particularly in newly launched residential projects.
Expert Opinion:
“RERA has been a game-changer for the residential real estate market in India. It has brought transparency to the sector, reducing fraud and project delays, which has enhanced investor confidence in the market.”
- Sanjay Dutt, Managing Director, Tata Realty
6. Rental Yields and Buy-to-Let Opportunities
While capital appreciation is a key driver for residential property investors, rental yields also play an important role, especially in high-demand areas like central business districts (CBDs). Investors are increasingly looking at buy-to-let opportunities, particularly in cities with strong job markets and growing urban populations.
Expert Opinion:
“Cities like Bengaluru, Pune, and Gurugram offer solid rental yields for residential properties. Investors looking for steady passive income should consider buying properties in areas with high rental demand, particularly those near commercial hubs and educational institutions.”
- Ravindra Kumar, Director, Knight Frank India
7. Challenges in the Residential Property Market
Experts caution that, like any market, the residential real estate sector has its challenges. Rising construction costs, land acquisition hurdles, and regulatory issues can delay project timelines and increase overall costs. Additionally, the volatility in the global economy, such as inflation or changes in interest rates, can impact the housing market.
Expert Opinion:
“While residential real estate remains a strong investment, there are challenges such as rising material costs and a slowdown in project deliveries. Investors should ensure they perform thorough due diligence before committing to any property, especially in developing markets.”
- Arvind Subramanian, Senior Economist, National Council of Applied Economic Research (NCAER)
8. Technology and Data Analytics in Residential Investments
The increasing integration of technology in the real estate sector is reshaping how investors approach residential property investments. From virtual property tours to data analytics that track price trends and demand cycles, technology is helping investors make informed decisions.
Expert Opinion:
“The use of technology, including virtual property tours and data analytics, is enabling investors to make better decisions. Investors should leverage tech-driven tools to analyze market trends, assess property values, and identify emerging investment opportunities.”
- Priya Agarwal, Co-Founder, PropTech Startup
9. Luxury Segment and High Net-Worth Individuals (HNWIs)
While affordable and mid-segment housing are popular, the luxury segment also continues to thrive. High-net-worth individuals (HNWIs) are increasingly investing in luxury residential properties, particularly in high-demand areas such as Mumbai, Delhi NCR, and Bengaluru. This segment has seen a surge in interest due to an improved economic environment and a growing appetite for premium living experiences.
Expert Opinion:
“The demand for luxury homes, particularly in metro cities like Mumbai and Delhi, has been strong, and it’s expected to remain so. For high-net-worth investors, luxury residential properties are an attractive option, offering both lifestyle value and long-term capital appreciation.”
- Amit Bhagat, Managing Director, ASK Property Investment Advisors
10. Interest Rates and Financing
The cost of financing is another important factor affecting residential property investments. Experts point out that lower interest rates, which are often influenced by the Reserve Bank of India (RBI), have made home loans more affordable, encouraging more homebuyers and investors. However, they warn that any hikes in interest rates could affect affordability and demand.
Expert Opinion:
“Low interest rates have made it easier for individuals to finance their homes. However, any increase in rates could slow down the housing market. Investors should stay informed about RBI’s monetary policy to make decisions on timing and financing.”
- Manoj Paliwal, Chief Economist, HDFC Bank