Home Seekers Focused on Properties Prices Rs 90 Lakhs -2.5 Cr

<span style="font-weight: 400;">The Covid-19 pandemic has significantly changed the outlook of the prospective home buyers, according to the latest CII-ANAROCK Consumer Sentiment Survey. For the first time, affordable housing is the lowest priority, with more than 34% respondent home seekers focused

BY Realty Plus
Published - Sep 7, 2021 4:23 AM

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The Covid-19 pandemic has significantly changed the outlook of the prospective home buyers, according to the latest CII-ANAROCK Consumer Sentiment Survey. For the first time, affordable housing is the lowest priority, with more than 34% respondent home seekers focused on properties priced between Rs 90 lakh and Rs 2.5 crore. While 35% favour properties priced between Rs 45 lakh and Rs 90 lakh, just 27% respondents voted in favour of affordable housing (priced <Rs 45 lakh). In the previous H2 2020 survey, approx. 36% respondent property seekers eyed budget housing. Just as the previous survey, real estate continues to be the best asset class for investment, but it is worthwhile to note the quantum of change in investor sentiments during the second wave. Notably, during the second wave investors were far better prepared as compared to the first wave when there was subdued investor confidence. As seen now, investor confidence in real estate has increased – to 54% during the second wave from 48% in the first wave. The stock market also seemed attractive for 34% investors during the second wave as compared to 24% in the first wave. Meanwhile, the yellow metal (gold) and fixed deposits as an investment class have become less lucrative for investors. Indian residential market is now majorly dominated by end-users. In the current survey, as many as 71% respondents looking to buy a property are doing it for self-use while only 29% are looking at it from an investment perspective. In comparison, during the Covid-19 first wave period survey, the share of investors was higher at 41%. One major factor driving this change – buying for self-use – is because affordability of homes has reached all-time best at approximately 27% in FY 2021 across all major cities. Offers and discounts doled out by developers coupled with lowest-best home loan rates are other major factors. Ready-to-move-in property continues to be the most preferred (32% respondents) among the prospective buyers. However, in comparison to the Covid 1st wave period survey, a dip in its preference was witnessed– at least 14% since the Covid 1st wave levels. One major factor influencing this change could be the fact that post-Covid, the new supply was largely dominated by branded developers and buyers considered it safe to buy from them. Also, there is limited inventory available in the ready category. Another possible reason is that developers have doled out multiple discounts and offers including flexible payment plans for their under construction projects which attracted prospective buyers. Interestingly, in the Covid 2nd Wave survey results, property which will be ready within 6 months is the 2nd most preferred choice for over 24% property seekers. Meanwhile, 21% property seekers are now willing to purchase new launched property. This is 4% higher than the pre- Covid period survey. Similar to the Covid 1st wave survey, property priced between Rs 45 lakh and Rs 90 lakh emerged the most preferred during the Covid 2nd wave period with nearly 35% property seekers preferring this budget range. Altogether, 69% of this demand came in from Hyderabad, Bengaluru and Chennai. Availability of cheaper home loans was the key factor for majority of these respondents. Notably, contrary to the Covid 1st wave survey, affordable properties (<Rs 45 lakh) took a back-seat this time and stood at the 2nd spot, accounting for over 27% share as against 36% in the pre- Covid survey – a decrease of 9%. Over 41% of this affordable housing demand currently came in from Pune, followed by 36% from Delhi-NCR and 31% from Kolkata. Further, around 25% property seekers preferred Rs 90 lakh to Rs 1.5 cr budget properties – increasing by 9% against the 1st wave survey. Demand for luxury properties (>Rs 1.5 cr) also increased – from 11% in the Covid 1st wave survey to 13% in the Covid 2nd wave survey results. Nearly 63% of this demand is from Mumbai-MMR, followed by Bengaluru and Hyderabad.