The consumer sentiment for bigger homes continues unabated. Out of a total of 4,662 survey participants, 42 per cent currently prefer 3BHKs, finds a report 'The Housing Market Boom’ released at the 5th Edition of the CII Real Estate Confluence 2023 in Mumbai.
As per reports, 40 per cent of the surveyed participants prefer 2BHKs, 12 per cent will opt for 1BHK, and six per cent seeks homes exceeding the 3BHK configuration.
The two realty hotspots Mumbai Metropolitan Region (MMR) and NCR have seen particularly strong momentum in the sale of high-ticket bigger homes over the last few quarters, finds the report.
In the expensive MMR, 2BHKs appear to dominate the preference charts of 43% of respondents in this region, but over 32% buyers there are looking to buy 3BHKs.
The report highlights the overall sentiments of buyers amid current headwinds including another possible rate hike by the RBI in the near future. If that happens, housing sales momentum in the top 7 cities may well be in for a bumpy ride as at least 96% prospective buyers state that higher home loan rates will affect their homebuying decisions in the future.
For over 80% property seekers, prices remain an important factor as apart from home loan rates, the basic cost of property has been on the rise in the last one year.
The data reveals that average property prices across the top 7 cities increased in the range of 6-9% in Q1 2023 when compared to Q1 2022, mainly due to an increase in the prices of construction raw materials and overall rise in demand. MMR and Bangalore recorded the highest 9% annual jump.
Currently, inflation is high and the state of the global economy directly or indirectly impacts housing demand in India. However, whatever demand gets deferred will be a temporary dynamic. There are high chances that by FY 25, the current turbulence will have passed and the housing market will bounce back, experts stated.
The report further finds that millennials continue to drive housing demand. Of total participants that chose real estate as an asset class for investment, at least 52% were millennials who are mainly looking to buy homes for self-use. End-users still dominate Indian housing market, with end-user vs investor ratio at 71:29. Of the total surveyed end-users, over 77% are millennials.
At least 36% respondents are zeroing in on homes that will be ready for possession within a year, and 58% want to buy properties priced within INR 40 lakh to INR 1.5 Cr.
Apart from price points and basic amenities in a project, the surveyed buyers are now focused on three primary aspects - timely project completion assurance, the availability of a study room, and adequate ventilation in the property. Over 90% of the surveyed homebuyers will not compromise on timely project completion, 62% insist on well-ventilated homes, and another 55% respondents consider a study room indispensable. It is evident that the COVID-19 pandemic has left a lasting impact on homebuyer preferences.
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