Over 80% prospective buyers likely to make new purchases in 3 months, JLL – RoofandFloor survey says
80 percent of the homebuyers prefer properties in the sub-Rs 75 lakh category. The demand of 3BHK has increased in Bengaluru, Chennai, Hyderabad, and Delhi NCR.
Almost 89 per cent of those surveyed, wanted to buy a home when asked to choose between buying and renting, according to ‘Homebuyer Preference Survey 2021: The COVID-19 Impact’ by JLL in association with RoofandFloor released on Wednesday.
“With more than 80% of the prospective homebuyers expected to make a purchase in the next three months, the residential market is expected to get back on the recovery path and 2021 is likely to end on an optimistic note," said Siva Krishnan, Managing Director, Residential Services, India, JLL.
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Developers are launching optimal sized houses to capture the changing preferences of consumers in the post-COVID era. In the residential real estate sector, there is still a great deal of uncertainty around what permanent changes we are likely to witness,” he added.
As per the survey, most of the buyers making a home purchase decision for self-use fall within the following three distinct categories, with an increase in the proportion of buyers in the two latter categories:
1. The first-time homebuyers
2. Homebuyers upgrading to larger or better houses
3. Homebuyers purchasing a second asset to be used as a holiday home
The market survey covered more than 2,500 prospective homebuyers with respondents spread across the top six cities of Mumbai MMR, Delhi NCR, Bengaluru, Hyderabad, Chennai, and Pune.
According to the survey, nearly 80 percent of the prospective homebuyers indicated a preference for properties in the sub-INR 75 lakh category. This has not changed much over the course of the pandemic.
Nevertheless, the size of the apartment has assumed greater significance and there is a clear preference for larger, more spacious homes. Infact, the buyers are today showing a greater willingness to relocate to suburban/peripheral markets to get larger homes while keeping the budget intact.
Cities like Bengaluru, Chennai, Hyderabad as well as the Delhi NCR market are the prominent cities where the demand for 3BHK apartments has increased. Layouts of apartments, presence of balconies and an additional small room for work/online classes are in focus. This trend is more prominent in the cities of Mumbai and Pune where 1BHK and 2BHK are usually the most sought-after configurations.
Homebuyers remain optimistic about the future amidst the current volatile business environment and consumer sentiments. Importantly, lockdown restrictions across cities are being eased and the vaccination drive is gaining significant momentum.
If the impending Covid-19 wave can be contained and consumer sentiments improve further with the festive season, the sector is expected to make a healthy recovery in the second half of 2021. New launches are expected to go up in H2 2021 as developers launch new projects in order to monetize their land banks,” stated Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.
“Post ‘Unlock 1.0’ of 2020, the uptick in residential sales was primarily driven by pent-up demand and the presence of ‘affordable synergy’ in the market. However, sustained recovery in the next few quarters and the resilience shown during the second COVID-19 wave are indicative of a fundamental shift in the sentiment towards home ownership. Residential real estate is an enabler of our existence and contrary to popular belief, recovery in the residential sector was quick and more resilient,” said Sriram Krishnaswamy, COO of RoofandFloor.
Buyers planning on making a purchase within the next 3 months
Developers have been operating on very thin margins for the past few years. As the market recovers, reputed developers are becoming less flexible in terms of offering price discounts and other benefits to homebuyers. Prospective homebuyers want to make the most of this ‘great time to buy a house’, with more than 80% of the prospective buyers inclined towards buying a house in the next 3 months.
Changes in decision making matrix: New paradigms emerge
‘Connectivity to office and schools’ no longer dictates home purchase decisions. Lower density environments, access to open green spaces, access to healthcare and the size of the apartment have moved up in importance in the decision-making matrix. Additionally, developer profile now occupies an even more significant position in the decision-making matrix.
Residential market to get back on the recovery path
The recovery process, which started in Q3 2020, was derailed in Q2 2021 because of the second COVID-19 wave. With most of the prospective homebuyers expected to make a purchase in the next 3 months, the residential market is expected to get back on the recovery path and 2021 is likely to end on an optimistic note. New launches are expected to go up in H2 2021 as developers launch new projects to monetize their land banks.
Most of the changes witnessed in the sector have been structural in nature and demand for homes is only expected to increase. Importantly, lockdown restrictions across cities are being eased and the vaccination drive is gaining significant momentum. If the impending Covid-19 wave can be contained and consumer sentiments improve further with the festive season, the sector is expected to make a healthy recovery in the second half of 2021, the survey said.
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