As many as 68 percent homebuyers are from the service class who prefer to buy high end and mid-segment housing units that account for 79 percent of total demand. Demand for 2 BHK units dominates with a 38 percent share, followed by 3 BHK units at 26 percent, says a new report by Anarock.
The service class buyers account for 68 percent demand. As many as 26 percent of sales are driven by doctors, lawyers, CAs and other business professionals, the report said.
Buyers' focus has clearly shifted from affordable housing (homes priced under Rs 40 lakh) to mid-end (Rs 40 - 80 lakh) and high-end homes (Rs 80 lakh to Rs 1.5 crore), the report said, adding that in FY21-22, nearly 80 percent of demand is for mid-end and high-end homes, with the affordable housing segment accounting for a mere 10 percent of the demand.
Chennai and Pune witnessed the highest demand in the mid-end segment and accounted for nearly 60 percent and 59 percent of the total demand in these cities. Bengaluru recorded almost 56 percent of demand geared towards the high-end segment.
Of the city' overall housing sales, Hyderabad displayed the highest demand for luxury (17 percent) and ultra-luxury (8 percent) segment homes priced above Rs 2.5 crore. While average prices in Hyderabad are much lower than in the Mumbai Metropolitan Region (MMR), property sizes in these segments are significantly larger than in MMR, the report said.
Across the major cities, the 2 and 3 BHK typologies yielded the maximum demand, accounting for 64 percent of the overall demand. Two BHK units are most popular in Chennai, where nearly 67 percent of sales during the fiscal year were for this configuration. Bengaluru sold the most 3 BHK units, which accounted for 49 percent of overall sales during the year, closely followed by Hyderabad with 44 percent, said Rahul Phondge, Chief Business Officer, ANAROCK Group.
In Delhi-NCR, over 4BHK and plots stole the show. The preference for independent and low-density living resulted in 4BHK accounting for 17 percent of sales, and plots accounting for 16 percent during the fiscal year. The region also witnessed 16 percent of the overall demand in 1RK/Studio category homes at the other end of the spectrum. End-users accounted for 93 percent of transactions, with two-thirds hailing from the service class, the report noted.
Due to MMR's urban sprawl and hectic market activities in peripheral locations, the demand for mid-range and high-end homes dominates. Mid-range housing accounted for 46 percent of overall demand during FY21-22, while high-end homes accounted for 39 percent. The preference for 2BHK units is rising, accounting for 50 percent of the demand. The prospect of future price appreciation is also attracting investors, with approximately 13 percent of buyers clearly stating that they are investing for the long-term.
On studying the buyer profiles, it emerges that 64 percent are from the service class, and 23 percent are from the business communities. This diversity indicates a healthy mix that will help the market withstand economic disruptions.
The Tech Halli also saw increasing interest from investors during the last fiscal. Nearly 16 percent of home purchases were by people focused on long-term investment. A significant part of this demand appears to be fuelled by an appetite for second homes in the city's peripheral locations. While the final verdict on the future of workplaces is yet to emerge, a hybrid model is likely to be more popular, especially among employees of the IT-ITeS sector.
Socially distanced living in the peripheral regions to ensure better pandemic safety protocols has also increased demand for plots and villas. These assets accounted for approx. 12 percent of transactions. This group of buyers experienced minimal or no professional impact from the pandemic and had accrued significant savings due to limited scope for general consumption.
Despite the recent marginal hike, interest rates are still attractively low, while ongoing government incentives still work well for first-time end-user buyers and second home investors. As prices begin to rise and the mortgage rate hardens, the current market dynamics may change.
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