There have been a lot of concerns in the housing sector over the Reserve Bank of India’s latest decision to raise interest rates. As such, the real-estate industry in Ahmedabad is feeling the heat of the economic pressures. According to sources, several industry players have appealed to the government to make special provisions for people looking for a residence in affordable housing segments. This segment makes up rather a huge chunk of the market and as such is affecting the industry.
However, this setback was implemented only in March this year, but the housing sector seems to have been booming in the previous year. At least if the number of home loans given out is any indication.
State Level Bankers’ Committee, Gujarat, said in a report that loan disbursals under housing finance increased 17% from Rs22,504 crore in 2019-20 to Rs26,299 crore in 2021-22. The report was unveiled at the 173rd SLBC meeting that was held in Ahmedabad earlier this week. Overall demand in affordable as well as middle-to-premium segments of homes remained good.
According to sources, the reason for good demand during 2021-2022 was because, during the pandemic, people became more aware of the need for good living spaces. Especially, with people working from home and children attending online schools, having individual as well as family space became important. The low-interest rates during the period only made it easier for people to purchase homes. Many people even decided to upgrade their homes, or even invest in a new one.
However, with current high-interest rates, inflation in all sectors, and other economic pressure, this market is seeing a slow-down. People are definitely postponing buying a house. The industry will have to see how it can maintain its performance in the current year too.