Mumbai, 19 April 2023: The consumer sentiment for bigger homes continues unabated. Out of a total of 4,662 survey participants, 42% currently prefer 3BHKs, finds the CII-ANAROCK report ‘The Housing Market Boom’ released at the 5th Edition of the CII Real Estate Confluence 2023 in Mumbai, where ANAROCK was Knowledge Partner, today. 40% of the surveyed participants prefer 2BHKs, 12% will opt for 1BHK, and 6% seeks homes exceeding the 3BHK configuration.
The two realty hotspots NCR and MMR have seen particularly strong momentum in the sale of high-ticket bigger homes over the last few quarters finds the report. Over 45% of property seekers in NCR are looking to buy 3BHK homes in the near future. In the expensive MMR, 2BHKs appear to dominate the preference charts of 43% of respondents in this region, but over 32% of 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% of prospective buyers state that higher home loan rates will affect their homebuying decisions in the future.
For over 80% of 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.
ANAROCK 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.
Anuj Puri, Chairman – CII Real Estate Confluence 2023 & Chairman – of ANAROCK Group, says, “Rate hikes are just part of the overall demand scenario. Recent layoffs by both large and small corporates are likely to have at least some impact on the demand in the upcoming two quarters and dent growth in the housing market. Many homebuyers impacted by layoffs may defer homebuying decisions until their employment situation stabilizes. Nevertheless, buying homes remains the top priority for everyone.”
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 FY25, the current turbulence will have passed and the housing market will bounce back,” says Puri. “Deferred demand is just that – it is put on hold, not destroyed.”
The report further finds that millennials continue to drive housing demand. Of the 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 the Indian housing market, with the end-user vs investor ratio at 71:29. Of the total surveyed end-users, over 77% are millennials.
At least 36% of respondents are zeroing in on homes that will be ready for possession within a year, and 58% want to buy properties priced between 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% of respondents consider a study room indispensable. It is evident that the Covid-19 pandemic has left a lasting impact on homebuyer preferences.