The Real Estate Sector in India is on a roll again. Confidence is finally back in the property sector and how! Buying activity is stirring up again in tier 1 and tier 2 cities as home seekers want to cash in on the low-priced unsold inventory and buy bigger homes at affordable prices.
In ANAROCK’s Consumer Sentiment Survey conducted in association with LIC Housing Finance Ltd, aspiring mid-range homebuyers are considering real estate to be a viable and safe investment again. Fence-sitters and first-time homebuyers who back-tracked earlier on investing in their dream homes are now looking at properties with renewed interest.
This new-found enthusiasm among buyers bodes well for developers across India who went through a tumultuous period in the past couple of years when the realty sector was on a downward slide fuelled by an economic downturn, demonetization and the NBFC crisis.
Watershed reforms like RERA and GST rejig, cleansed the real estate sector bringing transparency, accountability, and buyer confidence. This attracted foreign investors again who streamlined to invest in one of the hottest property markets in Asia.
Add to that the financial sops announced by the Government where it slashed GST rates for affordable housing units to the tune of 1% and 5% for under-construction units. And the Alternative Investment Fund (AIF) of INR 25000 crores earmarked for completion of several stalled and incomplete housing projects which perked up the hopes of the real estate sector. These band-aid measures restored the buyer confidence in the sector and gave the property market some hope to resuscitate its fortunes again.
And the results showed. Major property markets including Delhi-NCR, MMR (Mumbai Metropolitan Region), Pune and Kolkata warmed up again after staying resilient in the face of piled up inventory.
There is a positive feeling in the air. Both millennials and baby boomers are keen on lapping up 1 BHK, 2BHK, and studio apartments as the government extended tax benefits to people on their housing loans
ANAROCK in its survey found that 63% of the respondents are game on buying a property anytime in 2020. 46% of them bought properties in 2019 owing to attractive prices and 20% because of RERA implementation.
Though real estate developers took to affordable housing as a last-ditch effort to revive their flagging fortunes, ANAROCK found out that mid-segment properties priced between INR 45-90 lakh are drawing the highest consumer demand than affordable housing. 2BHK and 3BHK homes have become hot favourites as people are increasingly looking for bigger homes.
Delhi-NCR topped the demand among tier 1 cities for ready-to-move-in properties at 44%. Pune and Hyderabad come next though in the tier 2 category and outperformed Bengaluru amongst the most preferred destination for future investments. Relatively higher ROI, diverse customer base and a wide range of properties have led buyers to consider tier 2 and tier 3 cities as investment hotspots.
With renewed confidence to invest in real estate, 52% of home seekers prefer branded developers while putting their money on a property even if they charge a premium; while 48% of them will put their bet on small developers to save on extra costs.
The detailed survey sheds light on the fact that consumer sentiments are firmly planted on the side of ready-to-move-in homes and that 67% of the homebuyers will buy property for personal use in 2020. In case of parameters for home selection, connectivity to workplace counts as the top factor for 43% millennial property buyers.
If we look at the trends reigning in different cities, then in Mumbai Metropolitan Region (MMR), 32% of the people are in quest of property up-gradation while 44% are looking to invest in upgraded homes in Mumbai. 37% are willing to shift to less congested areas like Navi Mumbai.
Coming to Bengaluru, 45% of the people surveyed expect higher returns on their property investments in 2020. In Kolkata, 42% of the respondents consider “amenities on offer” as a top deciding factor while investing on homes. Around 56% of the Punekars prefer readymade homes to save on rental outgoes.
With the economy slowly looking optimistic and pay-out of millennials rising exponentially, home seekers are trying their luck at owning a dream home even at a younger age, as long as it is realistic and within the reach of their pockets.