The COVID-19 crisis has something positive for the residential real estate sector. At least the survey conducted by ANAROCK suggests so. A majority of 1910 participants, or 48 percent of the total participants in an ANAROCK survey, conducted to gauge housing market sentiment in COVID-19 times, chose real estate as their preferred investment asset class. Of these, 59% of intending buyers are end-users. The survey also indicates that homeownership is now a compelling priority for millennials facing uncertain times. Out of the total voters favoring real estate, 55% are aged between 25-35 years – and 68% are end-users. In the H2 2019 edition of this survey, only 42% were in this age bracket.
This special edition of ANAROCK’s Consumer Sentiment Survey was carried out in the lockdown period between 20th to 27th April. A total of 1910 respondents from across India and aged between 24-67 participated in this survey.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “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, stock market volatility, and recent-past financial sector incidents. Many of them now prefer buying over renting homes. The general homebuying sentiment is also guided by cheaper home loan interest rates, which currently average between 7.15% to 7.8%.”
While ready-to-move-in homes have been the preferred choice of end-users in the recent past, at least 34% of respondents in the current survey who prefer ready homes are investors – a massive rise from 12% 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.
Bangalore, Mumbai, and Hyderabad were the most preferred cities for at least 82% of the respondent buyers who had already booked properties either just before the coronavirus-induced lockdown or during it.
“The preference for reputed, organized developers with the least project execution risk has also risen,” says Mr. Puri. “Buyers with this preference have increased to 62% from the previous survey’s 52%. These buyers will pay more for quality rather than settle for projects by smaller developers. Interestingly, 14% of voters preferred homes built by government agencies like DDA and MHADA.”
Demand for affordable housing has remained more or less stable at 36% despite COVID-19. 37% of the respondents polled in the previous survey preferred homes in the INR 45 lakh budget range, close behind mid-segment homes priced INR 45- 90 lakh.