Demand for mid-range and premium homes remains high @Torbit Realty

Despite rising property prices and interest rates hikes in the last one year and more, this festive season, demand for mid-range and premium homes remains high and they continue to be the top choice of home buyers. According to Anarock Consumer Sentiment Survey (H1 2023) 59% of the prospective home buyers have expressed their preference for mid-range and premium homes priced between Rs 45 lakh and Rs 1,5 crore. This is a 10% sentiment increase for homes in this budget category over the survey’s H1 2020 edition.

The survey indicates that homes priced from between Rs 45-90 lakh are most favoured as 35% of prospective home buyers are looking to buy such homes, As many as 24% home aspirants prefer homes priced between Rs 90 lakh to Rs 1.5 crore.

According to Anuj Puri, Chairman, ANAROCK , demand for bigger homes remains undeterred, with 3BHKs once again superseding 2BHKs in the current sentiment? survey. Around 48% property seekers prefer 3BHKs over other configurations, while 39% still prefer 2BHK units. If we compare with the H1 2022 survey, we find that the demand for 3BHKs has been rising steadily – from about 41% prospective home buyers in H1 2022 to nearly. 48% in H1 2023. Bigger homes remain the top pick despite life returning to normal after the pandemic.

Among the top cities, demand for 3BHKs is particularly high in Bangalore (51%), Chennai (50%), Delhi-NCR (47%) and Pune (45%) where most home aspirants prefer 3BHKs. In Kolkata (52%), MMR (41%), and Hyderabad (47%), home aspirants prefer 2BHKs.

The survey also highlights a noticeable demand shift between ready properties and new launches across different cities. As of H1 2023, the demand ratio of ready homes to new launches stands at 28:27, denoting a significant gap reduction compared to H1 2020, when the ratio was 46:18.?A key reason for this shift is the increased new supply by large and listed developers, These established players, according to Puri, command much higher confidence among prospective homebuyers due to their reputation for timely project delivery.

High inflation has impacted disposable incomes of over 66% respondents in the H1 2023 survey, against 61% in the H1 2022 survey, indicating increased financial strain on individuals and households.? The impact is yet to reflect in housing sales across cities; however, any further increases will crimp residential sales growth. Likewise, any further home loan rate hikes – particularly if interest rates breach the 9.5%-mark – will have a ‘high impact’ on residential sales, according to 98% survey respondents.

As for demand for affordable housing, the survey indicates that it has shrunk further to just 25% in the current edition. Demand for sub- Rs 40 lakh homes has seen declining inexorably – from 40% in H2 2020 to 28% in H1 2022, and further down to 25% in H1 2023. Inflation and the economic slowdown have hit this target audience hardest, leading to a cautious ‘wait-and-watch’ approach.

With home loan rates staying stable at an average rate of about 9.15%, housing sentiment remains robust. However, 98% home aspirants feel that if home loan rates breach 9.5%, it will impact their buying decisions significantly. Real estate is the most preferred investment asset class for over 60% survey respondents, up 3% against the previous survey. As many as?52% millennials and 35% Gen-X respondents will use their investment gains from other asset classes for buying homes in the future. End-users continue to dominate housing sentiment with 67% prospective home buyers intending to buy properties for self-use – an expected trend as homeownership provides security in an uncertain economic climate. Demand for peripheries shrinks to 39% in H1 2023, in contrast to 45% in the H1 2021 sentiment survey. Majority (61%) of those showing their preference for buying homes in the peripheries, are investors while 39% are end-users.

Read the full report : https://www.torbitconsulting.com/mid-priced-premium-homes-are-top-choice-of-home-buyers/