- Owned homes regain millennial mojo ~ 55% property seekers aged 25-35 yrs (against 42% in H2 2019 survey)
- Over 62% home seekers will pay premium for homes by established developers with least execution risk (52% in previous survey)
- No impact of COVID-19 on affordable homes demand; 36% seek properties priced within INR 45 lakh (almost the same as in previous survey)
- 82% buyers have booked homes in either Bengaluru, Hyderabad or MMR
A majority of 1910 participants (~ 48%) in an ANAROCK survey to gauge housing market sentiment in COVID-19 times chose real estate as their preferred investment asset class. Of these, 59% of intending buyers are end-users.
The survey also indicates that homeownership is now a compelling priority for millennials facing uncertain times. Out of the total voters favouring real estate, 55% are aged between 25-35 years – and 68% are end-users. In the H2 2019 edition of this survey, only 42% were in this age bracket.
The security of owning a physical asset during a coronavirus-like crisis now combines with a rising aversion to high-risk investments.
As a result, the demand for residential real estate has increased. Millennials are key demand drivers, their preferences now dictated by the prevailing uncertainties, stock market volatility and recent-past financial sector incidents. Many of them now prefer buying over renting homes. The general homebuying sentiment is also guided by cheaper home loan interest rates, which currently average between 7.15% to 7.8%.”
While ready-to-move-in homes have been the preferred choice of end-users in the recent past, at least 34% of respondents in the current survey who prefer ready homes are investors – a massive rise from 12% in the previous survey. Investors’ growing aversion to taking risks in the wake of limited construction activity could be a major factor for the change. Also, by buying ready properties, they can soon begin to earn a steady rental income.
Bangalore, Mumbai and Hyderabad were the most preferred cities for at least 82% of the respondent buyers who had already booked properties either just before the coronavirus-induced lockdown or during it.
“The preference for reputed, organized developers with the least project execution risk has also risen,” says Mr Puri. “Buyers with this preference have increased to 62% from the previous survey’s 52%. These buyers will pay more for quality rather than settle for projects by smaller developers. Interestingly, 14% of voters preferred homes built by government agencies like DDA and MHADA.”
Demand for affordable housing has remained more or less stable at 36% despite COVID-19. 37% of the respondents polled in the previous survey preferred homes in the INR 45 lakh budget range, close behind mid-segment homes priced INR 45- 90 lakh.
(ANUJ PURI IS chairman of Anarock Peoperty Consiltants)