‘What if’ to be the buzzword for homebuyers in 2022

Deepak Srivastav bought an apartment in Goa in June 2021. When work-from-home became a reality of the IT workforce, it made sense for him to shift away from the maddening Bengaluru crowd and settle in the land of sunshine and beaches. By November-end, his office decided to implement the hybrid model and he was asked to report for work twice a week.

Manish Saxena took up a new job with a US-headquartered company that had its India office in Pune. He was all set to shift from Noida but the pandemic played spoilt sport. After the two COVID-19 waves, he had almost made up his mind to buy a property in his hometown in Lucknow but he received a call from office to join work in the last week of November.

Swayed by the popular narrative of bigger homes being the need of the hour, Suresh Prabhakar bought a 3BHK apartment in Gurugram post two waves of the pandemic. He had decided to stretch his budget as he was confident that he would get a salary hike at the end of the year. As luck could have it, he had to go in for a 40% salary cut. With his debt-to-income Ratio becoming higher, all his plans went haywire. As fate had it, even the property that he had bought has depreciated and selling it is not an option.

These real-life case studies clearly demonstrate that reality with regard to housing demand is different from what the industry narrative seems to suggest:

• This is the best time to buy a house


• With borrowing cost at an all-time low, people are eager to buy houses


• Property prices are have crashed


• People need bigger houses for work-from-home


• Reverse migration of talent pool is fuelling property markets in smaller cities

This industry narrative serves those stakeholders well who believe that this narrative without strong market fundamentals would result in a fairytale ending in 2022. They continue to refuse to acknowledge that 2022 is going to be the year of many “what ifs” for the prospective homebuyers.

Buyers, too, have multiple issues to address after having learnt some tough lessons in the last two years. They continue to pose questions:

• What if I lose my job in today’s uncertain market?


• What if my salary is reduced and I can’t service EMIs?


• What if I buy a remote house and work-from-home comes to an end?


• With inflation rising, what if my debt-to-income ratio gets into an uncomfortable zone?


• What if the property prices fall, and my loan-to-value is skewed?

2022 may not be an easy year for the average Indian homebuyer, especially with regard to making a conscious and quick decision to buy a house. The fundamentals of the market and macroeconomic outlook indicates 2022 could turn out to be even more challenging than 2021 for more than one reason.

The rising input cost of construction has put a serious question mark over the feasibility of the business in a price-sensitive market. Many developers with thin profit margins are facing a Catch-22 situation where the input cost hike may call for price rise but the demand side is not ready to absorb the hike.