Discounts offered during the COVID-19 pandemic, cheaper home loans and government incentives such as Maharashtra's stamp duty cut led nearly 62 percent of homebuyers to consider it expedient to buy homes right away. As many as 24 percent respondents have already booked properties (81 percent of this segment were previously unsure of buying) and 38 percent opted for newly launched projects, according to the CII-Anarock COVID-19 Sentiment Survey.
With work from home a viable option today, many prospective homebuyers are looking at the peripheral areas that offer bigger homes and a better lifestyle at relatively affordable prices, said the report that was unveiled on February 17 by CII and knowledge partner ANAROCK at the 3rd CII Real Estate Confluence themed Indian Real Estate Vision 2025.
Indian residential market is now seen to be heavily dominated by end-users. As many as 74 percent respondents are looking to buy a property now are doing it for self-use while just 26percent are looking at it from an investment perspective. In comparison, during the lockdown period, the share of investors was higher at 41 percent, it said.
Real estate's popularity as an investment asset class increased perceptibly post-COVID-19. About 57 percent respondents now favour property over fixed deposits, the stock market, and gold. As many as 59 percent property-favouring respondents were convinced after the pandemic unfolded, after riding the fence of uncertainty before COVID-19.
At least 43 percent respondents now prefer living in peripheral areas while just 28 percent favour homes in the city limits (in proximity to offices). Demand for branded developer continues to rise - the ratio of demand for branded vs non-branded developer stands at 61:39 post-COVID, against 52:48 in the pre-pandemic period, it said.
The previous ‘gold standard’ of Indian housing - the walk-to-work or short drive to work, by definition only in and around central corporate workplace hubs - seems to have shed much of its popularity for many prospective homebuyers today. Just 28 percent are now looking to live within city limits – in proximity to office. The work-from-home concept has become the next fulcrum for homebuying decisions.
Affordability is still a major concern for most prospective homebuyers despite a change in their preferences post-COVID – i.e. demand for bigger-size homes. No wonder, 37 percent respondents prefer to shift to peripheral areas for a bigger home at affordable prices. Another 30 percent respondents are looking to buy in the peripheries due to prevailing low prices there.
Millennial respondents continue to prefer homeownership over renting; of all respondents favouring real estate as an investment option, at least 48 percent are aged between 25 and 35 years.
“The survey underscores the massive impact that the coronavirus 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. Surprisingly, new launches are gaining traction post-COVID. As many as 26 percent of the survey's respondents will opt for homes in newly launched projects, which is an increase of 4 percent over the pre-COVID period,” said Anuj Puri, chairman - CII Real Estate Confluence 2021 and chairman - ANAROCK Property Consultants.
There was a decrease in the preference for ready-to-move-in homes – a reduction of at least 17 percent since the lockdowns and 6 percent since the pre-COVID levels. This is vouchsafed by data from ANAROCK's consumer sentiment surveys done before and during the height of the pandemic in May 2020.
"One major factor for this could be that post-COVID, new supply was largely by branded developers," says Puri. "Homebuyers consider it safe to buy from strong organised players. Also, there is limited inventory available in the ready-to-move category.”
In terms of consumer preferences, demand for bigger homes across all BHK configurations has risen post-COVID. The 2BHKs continue to be the hot favourite; however, buyers are now also on the market for larger sizes. As many as 69 percent of the survey's property-favouring respondents now prefer bigger 2BHKs (>600 sq. ft. area) vis-à-vis just 38 percent in the pre-COVID period. Previously, 62 percent of buyers preferred compact 2BHK units sized within 600 sq. ft. area.
The popularity of bigger configurations - 3BHK and 4BHK - has also increased as compared to the pre-COVID survey, most notably among NRIs. The latest edition of this survey finds that most NRIs now prefer luxury homes priced between Rs 90 lakh and Rs 2.5 crore. 3BHKs and 4BHKs are on top of their wish list. Out of the total 24 percent respondents who had already booked property recently, 38 percent were NRIs.
The ratio between end-use and investment is at 74:26 post-COVID; it was 59:41 in pre-COVID period, the survey said.
Affordable homes (above Rs 45 lakh) see highest preference post-COVID, with over 40 percent share against 31 percent pre-COVID – an increase of 9 percent; almost 38 percent of this demand is from Delhi-NCR, followed by 21 percent from Kolkata, the survey said.
As far as prices are concerned, in the short-term (i.e., 12 months), 67 percent respondents feel prices will remain stable; only 18 percent foresee an increase; over the long-term (i.e., >5 years), 83 percent think prices will increase, it said.
The survey gauges the homebuyers’ preferences amidst the ongoing pandemic, which led to emergence of significant trends in the Indian real estate industry. The main aim of the survey is to provide all stakeholders – consumers, developers, investors, sellers and owners including local and expatriates – deeper insights into the Indian property market purely from a consumer perspective.
Conducted in January 2021, the online survey saw nearly 3,900 participants (including NRIs) responding to it via different digital sources including email campaign, weblink and messages.