Home buyers Perception in India during Covid -19
If low interest rates (home loan interest rates are at 7-8% now) and high tax exemption (rebate against home loan interest payment is as high as Rs 3.50 lakhs per annum) were going to make a change in the consumer behavior, the Coronavirus outbreak is likely to halt that shift, at least in the near to medium term.
With property seekers unwilling or unable to undertake site visits, this could result in the postponing of purchase decisions. “With the Coronavirus pandemic impacting all sectors of the economy, the troubles have compounded for India’s realty sector, which has been dealing with a ‘challenging scenario’ since the economic and policy reforms were introduced. The slowdown since February-end is apparent and while site visits are almost non-existent, the decision-making process is hugely delayed,” says Hiranandani.
Are you ready to buy property in the next six months?
• No (53%,)
• Yes (47%,)
What’s stopping you from buying a new home?
• Job uncertainty 28%
• Property prices 49%
• Economic situation 23%
Best Time To Buy A House For End Use
Industry experts feel that this is the right time to buy a house because buyers are likely to get better deals and prices may go up in the near future.
The COVID-19 crisis has dealt a major blow to the real estate sector. The home buying cycle has been massively impacted, and transactions continue to remain low. This has, however, not impacted the prospective buyers’ sentiment much. According to a recent survey by 99acres.com, close to 60% of the Indian home buyers who were looking for buying a house before the pandemic are still planning to buy their homes within a year. However, 40% of the buyers have postponed their plans. The major contributor to delaying the purchase decision is uncertainty in the market (52%), followed by financial reasons (30%).
Positive Reports
According to ‘concerned yet positive – The Indian Real Estate Consumer report, real estate (35%) is still perceived as the preferred mode of investment, followed by gold (28%); fixed deposits (22%), stocks (16%).
Home buyers are likely to slowly return to the market in the coming six months as real estate is still perceived as the preferred mode of investment, a report by National Real Estate Development Council (NAREDCO) and Housing.com points out.
According to ‘concerned yet positive – The Indian Real Estate Consumer report, real estate (35%) is still perceived as the preferred mode of investment, followed by gold (28%); fixed deposits (22%), stocks (16%).
This pandemic has come as a rude setback for our industry and the allied sectors. In the current scenario, we can see a change in consumer behavior and perception, of owning a house with safe and secure surroundings, which will be the driving force for demand,” said Niranjan Hiranandani, founder-chairman, Hiranandani Group and National President – NAREDCO.
“Our survey clearly shows that potential home buyers who were searching for flats have pressed a pause button for the time being because of liquidity concerns and uncertainty over the COVID pandemic. But, a majority of them will gradually start returning to the market in the coming months,” said Dhruv Agarwal, CEO, Housing.com.
A majority of respondents surveyed (73%) comprise ‘first time home buyers’, who are looking to buy a ‘ready-to-move-in-house’ for end-use and are from the age group of 25-45 years. While 60% of respondents opined that for the next six months, they would prefer a ready-to-move-in property, 21% said they were okay with a property with a delivery timeline of maximum one year.
NAREDCO said that it believes, real estate will be ‘positive’ for both end-users and investors in the post-COVID-19 world. Those living in rental homes have realized the importance of being in their own homes while NRIs facing challenging times in their present domiciles are looking at creating a safe haven ‘back home’ in India. Demand for additional space for home offices is on the rise, with need for more efficient layouts. The importance of common amenities, business centers and more open spa .
The survey findings suggest that majority (59 percent) of the respondents think that the overall economic scenario will either remain at the current levels or may slightly see some revival in the coming six months.
Real estate buying in times of COVID-19
The Coronavirus fears have hit property markets worldwide. Thanks to technology, we are equipped with resources that will help home buyers and sellers through the pandemic. “Many have postponed their site visits or home-buying plans and home staging plans have gone for a toss but we know that we will adapt to this change in no time,” says Kumar Saurabh, a Ghaziabad-based real estate agent.
Mrudula Das is a 33-year-old ad agency professional and she believes that there will be a shift towards what she terms as the ‘new normal’. “We have always had real estate portals around us but I don’t think many of us used it the way that we will from now onward,” she says. For a lot of home buyers, online information poses to be what they consider groundwork and research. Hereon, real estate portals and online services have a much greater role.
In a recent survey by real estate agent company Benham and Reeves survey, 83% respondents said they would not abandon their home-buying plans due to COVID-19.
During the outbreak of SARS in Hong Kong in 2003, property prices fell by 1.9% while transactions fell by 33% on average through the duration of the pandemic, Zillow Economic Research show
The survey findings suggest that majority (59 percent) of the respondents think that the overall economic scenario will either remain at the current levels or may slightly see some revival in the coming six months.
Summary
Some of the common questions that buyers and sellers usually ask are will property prices fall owing to Coronavirus, will prices see a ‘correction’, will home buying and selling stop, will the capital market lose to the rental market, etc. It is important to understand that the housing market will bounce back from the temporary phase of inaction.
This, however, may be a temporary setback, as real estate portals gear up to face the aftermath of COVID-19. In the short-term, transactions will dip but in the long-run, property buying will still remain lucrative and promising.
Demand Spikes For Larger Houses In Bengaluru
BENGALURU: The pandemic appears to have made the average city resident realize the worth of his home, which is now doubling up as office. And since that arrangement is unlikely to change in the foreseeable future, home buyers are looking for bigger units – to ensure adequate space and comfort.
The shift in priorities is evident in the demand pattern. Queries at property builders in Bangalore showed that space and size have pushed utility down the priority rung.
Builders and brokers have noticed a spike in queries for ready-to-move larger homes priced between Rs 80 lakhs and Rs 1 crore after the Covid-19 outbreak.
“Around 80% of the demand is for 3 BHK homes from serious home buyers in the past two months,” said Pradeep Joe, chairman, Confederation of Real Estate Associates of India.
This trend is likely to continue for the next 12-18 months and is expected to gradually exhaust the ready-to-move inventory.
Further extension of six months by RERA for completion of existing projects should dry up the supply of larger – and built – homes.
“Since RERA has given an extension to builders to complete the under- construction projects, we will see very limited new inventory coming up in 12-18 months to fill this demand-supply gap,” said Bhavesh Kothari, Founder & CEO of Property First, a luxury property broking firm.
Bangalore has a very limited supply of large 3 BHK homes since no new launches have been announced in the past three months.
Further, fresh completions are unlikely to hit the market in the short term due to scarcity of labor and high input costs.
“We are witnessing an increased interest for larger homes, given that people now want to accommodate a dedicated study / office space within their homes. We are also seeing renewed interest in villas from buyers,” said Kishore Jain - President, CREDAI Bengaluru.
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