Gurgaon Real Estate | Property In Gurgaon | Real Estate In Gurgaon

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Impact of Rising Interest Rates On The Real Estate Market In Gurgaon
A rise in interest rates always affects the real estate market. The Reserve Bank of India's (RBI) recent decision to boost interest rates by 0.5% is likely to influence the interest rates of all existing home loans with floating rates. This rise in interest rates, combined with high building costs and price pressure in the real estate market, may impact buyer attitudes. The hike in interest rates may make it more difficult for prospective purchasers to purchase homes, perhaps slowing sales activity. However, experts believe that the impact on the housing market will be brief, given that the sector's fundamentals remain solid.
Role of government in rising interest rates
The recent decision by the government to raise circle rates for houses in Gurgaon by 10 to 30% has had a significant impact on the local real estate industry. This increase in circle rates has resulted in a substantial rise in residential, commercial, and agricultural land prices in areas such as Sohna, Dwarka Expressway, and Manesar. As per the directive from the district collector, ...
... the circle rates in Gurgaon have increased by 20%, while those in Badshahpur have seen an increase of 15-20%. The rise in prices has made it increasingly challenging for individuals to acquire property in the district, which is anticipated to have long-term implications for the real estate market.
Increase in housing prices
Despite this, many ups and downs are in the market. There is always a direct and indirect impact on the cost of housing. The increasing price of houses makes it very difficult for individuals to buy properties. The increase in raw material prices has been a major concern for the real estate industry, as it directly impacts the cost of construction and ultimately affects property prices. If the government can effectively control and stabilize these prices, it will not only provide relief to the industry but also encourage more buyers to invest in residential real estate. Additionally, implementing policies that promote affordable housing initiatives could further stimulate growth.
Demand Fluctuation
The recent rise in circle rates in Gurgaon is expected to have a significant impact on the local real estate industry, particularly on home loan interest rates and potential home buyers' decisions. While the increase in prices may affect the affordability of properties, experts believe that the impact will be more pronounced in the affordable housing sector, which is driven by the sentiment. Additionally, the proposed price increases by builders could further burden customers. Even in the premium home market, the higher loan rates act as a psychological barrier for buyers. As a result, there may be a short-term decline in housing demand. However, experts anticipate that the long-term consequences will not hurt the real estate market.
Conclusion
The increase in circle rates in Gurgaon is expected to significantly impact the local real estate industry, especially home loan interest rates and buyer decisions. This leads to difficulties for buyers in occupying their preferred homes. The proposed price hike by builders could pass on the burden to customers, potentially leading to a short-term decline in housing demand.