The current lockdown owing to the coronavirus crisis has hugely impacted the world economy as well as a majority of sectors across the globe, including real estate.
The current lockdown owing to the coronavirus crisis has hugely impacted the world economy as well as a majority of sectors across the globe, including real estate. However, there lies an opportunity in every crisis, and Covid-19 looks no different.
According to an ANAROCK Consumer Sentiment Survey — which was an attempt to gauge homebuyers’ preferences during the pandemic, which will invariably lead to emergence of significant trends in the Indian real estate industry — all industries including the real estate sector in India are now diligently working to innovate and strategize their business. Among the key noticeable trends, the residential sector is all set to embark on a different growth trajectory with ‘home ownership’ gaining significant preference among the new-age millennials and Covid-19 hasn’t dented demand for affordable homes.
Further, a majority of respondents now largely favour risk-free investments. Also, online home sales will begin to gain traction and leading developers with good track record will be the main beneficiaries of this change.
Here we are taking a look at the 6 key emerging consumer trends in the Indian real estate sector during the Covid-19 times:
1. Home ownership is a new priority for millennials
Covid-19 has somewhat changed the way millennials are thinking now. Out of all participants that voted for real estate as best asset class for investment, at least 55% were in the age bracket of 25-35 years as against 42% in the previous survey. Interestingly, 68% of all these millennials are end-users. Undoubtedly, physical assets render highest sense of security especially during exigencies such as Covid-19 or when stock markets plummet to new lows and financial markets witness a turmoil.
2. Bengaluru, Hyderabad and MMR saw maximum bookings
At least 82% buyers that booked just before or during the Covid-19 lockdown period claimed to have booked their homes in these three cities. Developers focussing extensively on digital sales tools are at an upper edge in crisis such as Covid-19 because despite lockdown they were able to close sales. Interestingly, the ANAROCK Group also sold 240 homes worth Rs 214.6 crore during the lockdown 1.0 period.
3. Sense of security associated with physical assets & lower home loan rates key factors determining change
Out of all the participants who were previously in no mood to purchase a piece of property but have now changed their decision during the lockdown period, a whopping 92% cited two major reasons for this sudden change – sense of security that physical assets provide during such exigencies & lower home loan interest rates, which are currently at all-time low, ranging between 7.15% and 7.8%.
4. Covid-19 hasn’t dented demand for affordable homes
It was widely anticipated that the affordable segment would be the worst affected in 2020 due to Covid-19 as concerns over its target audience’s limited income and fear of unemployment continue to rise. However, it doesn’t seem so. Similar to the previous survey, over 36% respondents prefer properties priced within sub Rs 45 lakh budget. It is also likely that in the current Covid-19 situation many buyers having higher budget previously would have actually reduced it. Many would not want to lock-in a large amount of money in such uncertain times. Instead, they would buy a more functional house based on their current needs only.
5. 62% buyers prefer to pay premium & opt for developers with least execution risk
A majority of respondents now largely favour risk-free investments. No wonder, demand for developers having least execution risk is at all-time high, even if the property is relatively higher priced. In the previous survey, just 52% preferred higher-priced property from branded developers over smaller ones that sold properties at lower price, but had high execution risk – thus recording a 10% jump during Covid-19.
6. Over 34% investors now prefer RTM homes
In a significant trend seen during Covid-19, unlike before many respondents seeking property from investment perspective prefer ready-to-move-in (RTM) homes. As many as 34% prefer ready homes over under construction ones probably because construction activity is completely halted across the country, inevitably leading to project delays by several months. In comparison, last survey trends indicated that just 12% investors preferred ready homes then.