[ecis2016.org] The latest homebuyer sentiment survey by ecis2016.org and NAREDCO reveals that more than half of the homebuyers across the top eight cities are looking for ready-to-move-in properties. With increasing focus on homeownership amidst the pandemic, consumers, mainly end-users, want to buy homes that are available now as opposed to under-construction properties, which as per the research findings, will take 3-4 years to complete.
The last two years, riddled with the COVID-19 pandemic, have stoked the need for personal space and accommodation as people were forced to stay indoors due to restrictions on mobility and the work from home scenario. The aftermath of such structural changes reinforced the importance of homeownership in the overall scheme of things. Further, the incentives such as stamp duty waivers, historic low-interest rates and developer discounts acted as catalysts in attracting the fence-sitting buyers post the first wave. Coupled with this, the improving economic scenario, income stability and tapering unemployment (which has been in the range of 6-8 per cent post spiking to 27 per cent and 11 per cent during the first and second wave, respectively) strengthened the homebuyer sentiments, which had taken a dive during the beginning of the pandemic in 2020.
Bearing testament to the improving consumer sentiments in the residential realty sector, ecis2016.org’s Residential Realty Consumer Sentiment Outlook H1 2022 report sheds some light on the positive movement in the homebuyer’s outlook and preferences for the upcoming period. The report indicates that 79 per cent of consumers are optimistic regarding the Indian economic outlook in H1 2022 – a pivotal factor in any homebuying decision, as opposed to only 59 per cent expressing this confidence in the economy in the same period in 2020. The positive turnaround comes from the ongoing vaccination drive – globally applauded for its sheer scale and coverage, a less severe third wave and comparatively less stringent curbs across cities. Corroborating the positive homebuyer sentiments, residential demand annually grew by 13 per cent YoY in 2021 and has started on a good note in 2022, with the first quarter registering a 7 per cent YoY uptick in residential sales across the top eight cities.
As homebuyers return to the market, the report findings suggest noteworthy trends that will have a bearing on the residential sales in the country in the upcoming months. Proximity to social infrastructures such as healthcare facilities, educational institutions, and open and recreational spaces is cited as a driving factor to buy a home in the top eight cities. Another crucial trend seen from the report is that as many as 57 per cent of homebuyers are looking for ready-to-move-in properties as opposed to under construction. As the homebuyer in the current market scenario is predominantly an end-user, a ready-to-move-in-property provides a cushion against the downside of the trust deficit created due to defaulting developers and stalled projects witnessed in various projects across the country. Also, no GST on RTMI has been recognised as a driver for the preference for this segment. End-users who are either first-time buyers or people looking for an upgrade and avail of the benefits of low-interest rates amidst the pandemic prefer homes that are ready for possession rather than waiting for the next 3 to 4 years for inhabiting the property.
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For the coming quarters, projects with an RTMI inventory coupled with features such as proximity to social infrastructure, and discounts and waivers will continue to garner homebuyer interest. However, the age of inventory will also be a deciding factor for closing in on such RTMI property purchases since older projects will not fetch the same buyer interest compared to the newer ones. In a nutshell, the insights from the homebuyer survey suggest that factors such as infusion of RTMI inventory and incentives such as stamp duty waivers, flexible payment plans, discounts, coupled with low-interest rates, will be vital to catapult the end-user driver residential market activity back to the pre-pandemic levels in the upcoming period.
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