Soaring Real Estate Prices - Buy Now or Wait

The Case for Buying Now

India’s housing market has once again become the talk of the town, with people discussing the skyrocketing ‘Real Estate’ prices as long-term growth or just overpriced. People believe that since COVID-19, prices have skyrocketed across the real estate, gold, stock market, and crypto markets, making it a difficult situation for investors to identify genuine value and long-term opportunities. There is a surge in housing prices, especially in tier-1 cities like Mumbai and Delhi, raising a prominent question of whether the prices are sustainable and justified because of urban migration, rising income levels, and infrastructure development, or if it simply suggests the prices are inflated. Buying a house is one of the biggest financial decisions anyone can make, as it is a long-term decision that requires many considerations, such as current market analysis, budgeting, and home loan interest rates. Pointing to the home loan interest rate, the RBI has kept interest rates stable due to inflation concerns. Experts have predicted that the interest rates will gradually reduce in early 2026, which could make borrowing cheaper. However, despite the anticipation of lower interest rates, affordability remains a major concern. One should consider buying only if one is purchasing for actual living, not as an investment option for long-term returns, or if one can handle a short-term value loss for long-term growth.

Pradhan Mantri Awas Yojana

To understand the current scenario of the Real Estate market, we must analyse the government incentive “Pradhan Mantri Awas Yojana”. Pradhan Mantri Awas Yojana – Urban, a flagship Mission of the Government of India being implemented by the Ministry of Housing and Urban Affairs, was launched on 25th June 2015. The Mission addresses urban housing shortage among the EWS and LIG categories, including the slum dwellers, by ensuring a ‘pakka’ house to all eligible urban households by the year 2022, when the nation completes 75 years of its independence. The PMAY has changed how many Indians look at buying a home. For a lot of people, especially middle-class families, owning a house was considered a luxury. PMAY has made that a reality by giving interest subsidies on home loans, helping buyers pay smaller EMIs. Because of this, many first-time buyers are entering the market, thereby increasing the demand for affordable homes. But at the same time, prices in big cities like Mumbai and Delhi have gone up so much that even with PMAY, buying a house seems out of reach. While the PMAY supports affordable housing and gives confidence to LIG House buyers, it also highlights how tough the real estate market has become, where even government help can’t fully bridge the gap between rising prices and people’s incomes.  

Renting vs Buying - Better Alternative

This topic has become a hot financial debate in India as the current market prices have raised the need to consider renting as a substitute for buying properties. Housing is an emotional investment for many Indians even today. It is our nation’s dream to own a house for peaceful living. Just like land, a house is seen as an investment for a safer future. Buying a house when the prices of that area are inflated isn't the best option available. It also depends on the loan-to-cash down ratio, tenure of the loan, and interest rate. People must also consider the principal-to-interest ratio of initial EMIs. These factors should be considered while making the decision regarding renting or buying. Renting is usually the wiser short-term choice, as renting is a smart move that gives you tremendous flexibility in moving around based on your needs and likes. While buying should be a carefully timed long-term decision, once prices and rates become more reasonable.

Future Trends

Experts believe that the next phase of Real Estate will be  more stable than the post-COVID recovery scenario, as the economy has recently come out of the worldwide trauma. Prices may not see a sudden dip; however, the rates will slowly decline, especially in cities where property rates have already gone beyond affordability. As discussed above, the RBI will reduce the rates, resulting in increased demand, helping revive the balanced structure of the economy. At the same time, new infrastructure projects like metro expansions, expressways, and upcoming airports are expected to increase the real estate potential of developing areas and smaller cities. However, experts warn that the market will gradually become more sensitive to the ongoing price, with buyers shifting their focus towards value, transparency, and location rather than just pure speculation. Overall, the future of India’s real estate looks stable, but this is just the prediction of experts, and one should not solely rely on any source but analyse the market trends and understand frameworks to gain true insights into the market conditions and understand the future contingencies, resulting in rational decision-making.  

Real Estate Crash

The only possibility that real estate prices can crash in India is if the Indian government suddenly demonetizes all currency notes higher than 50 rupees. Real estate is where most of the black money is usually found. If the government makes it harder to  store high-value currency notes, real estate prices will not sustain, as black money has become the backbone of cities like Bangalore, where  the price of land is around 16-18K per sq ft., whereas the government-guided value is around 5k. People normally pay only the guidance value rate in white and the rest in cash. It is worse in the outskirts of Bangalore, where an acre of land that goes easily for 5 crore plus in the market will have not more than 50 lakhs as the guidance value. All the money earned by politicians and government officials through corruption eventually ends up in real estate, making black money the backbone of the real estate sector, which may result in soaring prices.

Conclusion

In conclusion, India’s housing market is at its turning point. While property prices have reached their peak, experts have suggested that the market will become stable in the next phase. Buying a house today is no longer just about emotion or status; it's a financial decision that demands clarity, patience, and resilience. Government initiatives like PMAY have made the process more accessible, but affordability is still a challenge that the nation must overcome. Renting is still a relevant option for those seeking flexibility, while buying suits those ready for long-term commitment and stability. Ultimately, there’s no one solution for all; the best choice depends on the goals, finances, and lifestyle. What matters most is making a rational decision based on market analysis and long-term planning while considering the short-term aspect. 

By- Krishna