Almost 50% of potential buyers find homes unaffordable: Report

The report showed that the average price per square foot had increased by 7 percent in Bengaluru, 3.5 percent in Mumbai, and 4 percent in Delhi-NCR over the last 5 years.

Among the people surveyed, at least, 21 percent believed property prices had gone up and 17 percent said the higher interest rates had forced them to defer purchases.

The survey mentioned that about 43% of the buyers were looking to buy a property below Rs 60 lakh. Saurabh Garg, co-founder and Chief Business Officer of NoBroker, said: "In city centres, it will be difficult to find a house in this budget. The figure of 43 percent used to be 50-70 percent last year. People have increased the budget."

The report found homes priced above Rs 1 crore had seen a higher jump. Homes above Rs 2.5 crore had risen even faster.

NoBroker also found that homebuyers' sentiment had remained strong despite hardening home loan rates and increase in home loans and property prices.

About 46% of people surveyed chose loan-to-value ratio as the most important element to take into account when choosing a home loan.

"This can be the case since a higher loan-to-value ratio means the ability to purchase a property with higher ticket value," the survey added.

Security of owning a physical asset surfaced among the major reasons last year as well when 38 percent of people had cited it as a reason for wanting to buy property, the survey said.

More preferences in areas

With rapid development across cities, a 2 percent rise in migration towards the city centres has been observed compared to last year. Across the surveyed cities, less than 30 percent of people, except in Mumbai and Pune, were eager to buy a home in the suburbs.

"Pune saw a major uptick in terms of people choosing to invest in suburbs as compared to cities since 2021. This is because Pune suburbs or the outskirts have great options of residential projects to choose from e.g. Hinjewadi, Kharadi, Pimpri, Wakad and so on," the report added.

Owing to well-connected suburbs in Mumbai, with growing office space, about 39 percent of people are eager to buy a house, the highest across all cities.

Realtors say a major slowdown during three waves of Covid has unlocked fresh inventories in pockets across city suburbs.

In Bengaluru, the survey found Bommanahalli, Hebbal Vidyanaryapura, Varthur, and Kaggadasapura to be the top-performing micro-markets. In Mumbai, Goregoan West, Thane West, Mira road, East Kandivali, and East Taloja topped the list.

Garg, said: "In city centres, vacant land parcels are unavailable….most of the transactions happen in already constructed properties or resale."

Additionally, Garg added, infrastructure in the suburbs plays an important role in boosting home-buying sentiment. Especially in Bengaluru, floods and poor infrastructure, other than the airport area, have dented the real estate sector's image. "However, upcoming metro lines at Outer Ring Road, Whitefield, and Electronic City might boost the sentiments," he added.

The pandemic shift, RERA compliances

With growing needs for security and larger homes, especially after the pandemic, 67 percent of people said the construction quality of a building was crucial in shortlisting a property.

In cities with the most delayed projects across India, more homebuyers have started looking at regulatory compliances before buying a home. About 51 percent in Bengaluru, 59 percent in Mumbai and 50 percent of people in Delhi-NCR looked at the regulatory status before completing a transaction.

However, 17 percent of people surveyed in Delhi-NCR, the highest across all cities, said Real Estate Regulatory Authority regulations have failed to boost their confidence in buying a home.

With the pandemic shift, more homebuyers have moved towards gated communities, owing to an array of amenities that are available.

At the same time, about 56 percent of those surveyed mentioned that gated community house availability became scarce post-Covid-19. NoBroker found maximum scarcity in cities like Pune, Bengaluru and Hyderabad.