– 25% of the respondents are looking for investment opportunities
– Around 9% of the respondents have already made a property purchase
– Every 1 in 3 people looking for high discounts and distress sale opportunities
Noida, Nov 18, 2020: The onset of the festive season, after months of uncertainty due to the outbreak of the pandemic and the national lockdown, has finally uplifted the consumer sentiment in the residential real estate industry as investors are making a comeback while looking for exciting deals, reveals the Magicbricks Property Buyer’s Sentiment Survey- 3rd Edition.
In the last six months the market had seen a dip in the number of transactions but recent trends reflect recovery with consumer searches on the Magicbricks portal surpassing the numbers during pre-COVID months by 30%-40%. The report also reveals that contrary to the popular belief that transactions have suffered during the pandemic induced lockdown, 9% of the respondents actually made a property purchase during the COVID-19 period.
With attractive discounts and offers made available by various developers, investors are now hunting for attractive deals in the market and it now contributes to 25% of the intent to purchase a property. The first (April) and the second (July) edition of the sentiment survey had revealed that investors had exited the market amidst uncertainty. Now their return augurs well for the industry, which is now witnessing a renewed interest from all segments of consumers indicated by the increased traffic on magicbricks. The latest sentiment survey states that 1/3rd of the buyers are now looking to buy on the availability of discounts launched by many developers across the country in a bid to reduce their inventory overhang.
The survey states that ‘Opportunist Searches’ have increased during the pandemic with every 1 in 3 people looking for high discounts and distress sale opportunities as the people are more certain about the prices, the festive season has also uplifted the sentiment.
Commenting on the report, Mr. Sudhir Pai, CEO, Magicbricks, said: “The onset of the festive season coincides with the time when most of the companies have started to improve their outlook and plans for growth. With uncertainties around the economy and jobs now stabilising, we are witnessing a surge in property searches on our platform and it has surpassed the pre-Covid levels by 30%-40%. Also, one interesting outcome of pandemic is that it is likely to have a positive long-standing impact on the real estate sector with people realising the importance of home ownership. And with a lot of good deals and discounts available, it is now a buyers’ market so much so that even investors have made a comeback. Our latest sentiment survey suggests that around 25% of the respondents are now looking for investments as compared to 13% just three months ago. This bodes well for the industry and the next six months would be crucial for the real estate industry as we hope this pent-up demand converts into transactions.”
Besides this, some of the supply side push such as all-time low interest on home loans and stamp duty waiver in some states also helped to push the fence-sitting buyers to execute the transactions. While the respondents believe that they may resist for another three months, 2021 may turn out to be a boom year as a result of the pent-up demand for the last nine months.
Price dynamics and incentives to tap surged demand
There is an increased maturity being observed in respondents in the current wave (Wave 3), in October, with less than 45% of the respondents expecting the prices to decrease further, although discounts can act as a trigger to purchase property. In the 1st and the 2nd wave (in April and July of the same year), about 3 out of 4 were expecting prices to decrease further. Demand witnessed an upsurge even sharper than before the pandemic, but towards affordable and mid-segment properties, which form a bulk of the supply in most cities, even as consumers have reduced their budgets. Mirroring the search trends, prices have also bounced back to pre-COVID levels in most cities.
Incentives offered: Along with an increased demand for bigger/safer spaces, and better amenities (including large open spaces and co-workspaces) in the project, the buyer’s market – as it has become during the pandemic – is also being driven by attractive deals and discounts, flexible payment plans and festive offers. These incentives include the stimulus by centre and state governments to cut down rates and stamp duties, developers have also introduced innovative marketing techniques and discounting plans to sell their ready-to-move inventory.
Types of deals being offered by builders include- cash deals and discounts, freebies and accessories, waiver on duty components, deferred payment plans, and other innovative schemes such as lower interest rate, option to swap properties in the case of struck projects, etc.
About the Survey
The Magicbricks’ Property Buyer Sentiment Survey is designed to understand buyer’s updated outlook of the real estate market during the crisis, the current deciding factors for purchasing property and the new property preferences and consumption patterns. These factors are expected to lead to the emergence of significant trends in the Indian real estate industry.