More People Think Now’s A Good Time To Buy House: CII-Anarock Sentiment Survey
Buying homes has gained precedence over renting, bigger-sized houses are seeing increased demand and the “walk to work” model is becoming less popular as projects come up on the peripheries of urban areas.
These, among other findings, are from a Covid-19 sentiment survey jointly conducted by the Confederation of Indian Industry and the property consultancy Anarock, which was released at the third CII real estate confluence on Feb. 17, titled “Indian Real Estate Vision 2025”. Nearly 39,000 people, including non-resident Indians, participated in the online survey held in January, with responses recorded through digital sources like email campaigns, weblinks and messages.
With deals and discounts being offered by developers, and home loans available at lower rates, nearly 62% of the survey’s respondents intend to buy homes immediately. As many as 24% of respondents have already booked properties and 38% opted for newly-launched projects.
The Covid-19 lockdown came when India’s cash-driven real estate sector was yet to fully recover from the government’s move to outlaw nearly 86% of the currency in circulation overnight in November 2016. A stricter housing law and a credit crunch following defaults by IL&FS subsidiaries worsened the stress, causing an inventory pile-up. The pandemic then struck—denting sales further.
The study also highlighted investment preferences among Indians. About 57% of respondents favour property over fixed deposits, the stock market and gold. Nearly 59% of property-favouring respondents were convinced after the pandemic unfolded.
According to Anuj Puri, chairman of Anarock Property Consultants, the survey underscores the massive impact the pandemic has had on home-buying decisions. “The work-from-home and online education culture has resulted in buyers seeking larger homes, even if it entails moving to peripheral areas,” he said. Surprisingly, new launches are gaining traction post-Covid. 26% of the survey's respondents will opt for homes in newly-launched projects, which is an increase of 4% over the pre-Covid period.”
There was a decrease in preference for ready-to-move-in homes by at least 17% since the pandemic-induced lockdowns and 6% since pre-Covid levels.
That, according to Puri, was because new supply was largely by branded developers. “Homebuyers consider it safe to buy from organised players,” Puri said. “Also, there is limited inventory available in the ready-to-move category.”
The demand for bigger homes across all BHK (bedroom-hall-kitchen) configurations has risen post-Covid, the survey said.
“2BHKs continue to be the hot favourite; however, buyers are now also on the market for larger sizes,” it said. “69% of the survey’s property-favouring respondents now prefer bigger 2BHKs (greater than 600 sqft area) vis-à-vis just 38% in the pre-Covid period. Previously, 62% of buyers preferred compact 2BHK units sized within 600 sqft area.”
The popularity of bigger configurations—3BHK and 4BHK—has also increased compared to pre-Covid levels, notably among NRI buyers. Most NRIs now prefer luxury homes priced between Rs 90 Lakh and Rs 2.5 crore, it said. “3BHKs and 4BHKs are on top of their wish list. Out of the total 24% respondents who had already booked property recently, 38% were NRIs.”
- 43% respondents now prefer living in peripheral areas while 28% favour homes in city limits (in proximity to offices).
- Demand for branded developers continues to rise—the ratio of demand for branded vs non-branded developers stands at 61:39 post-Covid, against 52:48 before it.
- Millennial respondents continue to prefer home ownership over renting; of all respondents favouring real estate as an investment option, at least 48% are aged between 25 years and 35 years.
- Ratio between end-use and Investment is at 74:26 post-Covid. It was 59:41 in pre-Covid period.
- Affordable homes, or those priced less than Rs 45 lakh, witnessed the highest preference post-Covid, with over 40% share against 31% pre-Covid. Nearly 38% of this demand is from Delhi-NCR, followed by 21% from Kolkata.