Wealth Guide: Real Estate – Every year brings new challenges and opportunities to the rental market, and this year is be no different. After a year of rent lows, highs, and lingering affordability problems from the pandemic, strong and positive momentums are expected to prevail in Indian real estate in the upcoming financial year backed by the solid structural foundation, gain in demand, and lowered home loan rates. Anurag Goel, Director, Goel Ganga Developments, speaks on Real Estate Market Forecast and What It Means For Rental Owners.
‘Rent Prices Will Increase in a Competitive Market’
“Rent prices experienced major declines in some areas at the start of the pandemic, but rents have slowly returned to pre-pandemic levels in some markets and come soaring back in others. Recent data shows rents in major tech cities quickly rebounding as renters move back and steep rent growth in cities across the country. Even though below-average rent growth continued into 2021, an increasing demand for rentals combined with low rental vacancy rates is expected to fuel the rental market heading into 2023,” predicts Anurag Goel.
‘Higher Demand for Rentals’
“Similar to rent prices, home prices and mortgage rates will keep rising. An increasingly competitive homebuying market means that those who can’t compete for a home will likely continue to rent, increasing the demand for rental units. Those who moved in with family during the pandemic may be ready to move out and resume renting, forming a new household and adding to the demand for rental properties,” Goel added.
‘Real Estate Investors Will Continue to Benefit’
“Rents will continue heading up; increasing yields and total returns over time, as well as building equity in blossoming property values. Rising home prices paired with increasing rent puts real estate investors in a promising position and may encourage some investors to add new properties to their portfolios, even as mortgage rates increase,” he explained.
‘Demand for short term rentals will grow’
“Short-term rentals suffered through 2020 and 2021. In 2020, for example, demand for short-term rentals contracted by a huge 16.1% for the year. The pandemic stopped people from going on holiday, it stopped people from moving about. However, as the new normal continues to be established, people are going to want to vacation. Ahead of 2022, a rise in demand for short-term rentals is good news for investors who have held their short term rentals throughout this difficult period,” he added.
“This means it is a great time to invest in rental property, a trend that is gaining more traction in certain regions. For investors, who have a long haul and not looking out for quick returns, real estate will be an exciting option to explore in FY 23. The upswing in the market will also stem from a favourable economic outlook,” he concluded.
(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)