India’s residential realty has sustained its momentum since the start of 2022. According to Housing Research, in the July-September 2022 quarter, the new supply has remained at a 7-year high for second consecutive quarter, while demand recorded a 49 per cent uptick as compared to same period previous year. However, the sector is currently grappling with rising input costs due to upward inflationary pressures. This hike in construction costs is eventually being passed on to the homebuyers by developers amidst the diminishing profit margins. To add to this, currently, the market lacks stimuli such as stamp duty waivers, tax rebates, and discounts and schemes, which have had a bearing on the homebuyer sentiments.
Corroborating with the market sentiments, our consumer survey indicates an overall cautious yet optimistic approach amongst homebuyers for the next six months. While the economic outlook has moderated marginally, consumers are optimistic about their future earnings which lends optimism to the sector in the scenario of rising prices. Homebuyers, mainly end-users, are looking for properties with healthcare services, and recreational and open areas in close vicinity. Below are the details of insights and trends based on the homebuyer outlook for July-December 2022:
- Homebuyers are cautious yet optimistic about the economic scenario for the coming months, with 73 per cent opining that the economy will improve in H1 2022, as compared to 78 per cent in the year-ago period. While the ongoing global uncertainties have moderated the outlook, the sentiments regarding the economy still remain well above the dip recorded during 2020.
- The income outlook, on the other hand, continues to strengthen and has reached an all-time high of 65 per cent since 2020. Strong services activity, optimistic hiring scenario and range-bound unemployment rate have all acted as sentiment boosters, bolstering consumer confidence in their future earnings.
- Real estate continues to be the preferred asset class compared to other assets such as stocks, gold and fixed deposit. This can be accredited to pandemic-induced factors, such as the increased importance of home ownership, the hybrid working model, and the need for safety and security.
- In the backdrop of upward pressure on property prices and waning sops such as stamp duty waivers and low-interest rates, the majority (73 per cent) of the homebuyers opined that flexible payment plans and discounts would be the driving factors for buying a home in the next six months.
- The pandemic has visibly altered homebuyer preferences. As also seen from our survey, where most respondents are looking for properties having healthcare services followed by recreational and open spaces in close vicinity.
- Digital sales and marketing platforms have been ranked as the top avenues to acquire information about properties, according to potential homebuyers. While search and discovery always begin online, such platforms have evolved to offer advisory and transactional support.
