With uncertainty prevailing on account of coronavirus and stock market volatility, many people, especially millennials, now prefer investing in real estate over renting homes. Nearly 59 percent of intending buyers are end-users, said a survey that gauges housing market sentiment in COVID-19 times.
Out of the total voters favouring real estate, 55 percent are aged between 25-35 years and 68 percent are end-users, it said.
While ready-to-move-in homes have been the preferred choice of end-users in the recent past, at least 34 percent of respondents in the current survey who prefer ready homes are investors - a rise from 12 percent 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, the survey noted.
Bengaluru, Mumbai and Hyderabad were the most preferred cities for at least 82 percent of the respondent buyers who had already booked properties either just before the coronavirus-induced lockdown or during it, the survey said.
"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,” said Anuj Puri, Chairman - ANAROCK Property Consultants.
The general homebuying sentiment is also guided by cheaper home loan interest rates, which currently average between 7.15 percent to 7.8 percent, he said.
The preference for reputed and organised developers with the least project execution risk has also risen. Buyers with this preference have increased to 62 percent from the previous survey's 52 percent. These buyers will pay more for quality rather than settle for projects by smaller developers.
Interestingly, 14 percent of voters still preferred homes built by government agencies like DDA and MHADA, the survey said.
Demand for affordable housing has remained more or less stable at 36 percent despite COVID-19. As many as 37 percent of the respondents polled in the previous survey preferred homes in the Rs 45 lakh budget range, close behind mid-segment homes priced Rs 45- 90 lakh.
The Consumer Sentiment Survey was carried out in the lockdown period between April 20 to April 27, 2020. As many as 1,910 respondents from across India and aged between 24-67 participated in the survey.