Housing.com’s IRIS index has closed at an all-time high and reached 117 points in December 2021, compared to 108 in December 2020. The index has picked up momentum even as India is facing off against the third wave of the COVID-19 pandemic, which has clouded the nation’s economic recovery. The impact of the new COVID-19 variant and ensuing third wave has been cushioned by the ongoing vaccination drive (a total of 1.7 billion doses have been administered) and minimal COVID-19 restrictions, allowing homebuyers to continue their online property searches despite the third wave.
The overall trend in residential markets corroborates with the leading indicators, which have continued to recover. For instance, at 55.5, the manufacturing and services PMI continued to expand in December 2021. The credit offtake expanded by 7.1 per cent in November, its fastest in the past ten months. The Reserve Bank of India’s (RBI) consumer confidence index suggests that the current sentiment index is at a ten-month high, and the future expectation index reached 109.6 in November, compared to 107.0 in the previous month. Consumers, including homebuyers, are cautiously optimistic about the future economic and income scenario despite the resurgence of the new COVID-19 variant.
As homebuyers continue their online property searches, we are seeing maximum queries for apartments with a 2BHK configuration. However, with the remote and hybrid working models highlighting the need for extra space, homebuyers are also exploring bigger apartments. The online queries for 3+BHK configurations grew 25 per cent YoY in December 2021.
Mumbai continues to hold the first spot; Bengaluru retains the third position for the second time in the top-20 cities recording maximum online high-intent homebuyer activity
Mumbai continues to hold the first spot on the IRIS index, followed by Delhi NCR and Bengaluru. In Mumbai, maximum people searched for homes within the periphery of Thane West, Mira Road West, and Kharghar. The queries are majorly for apartments with a 1BHK configuration and ranging between the INR 50 lakh—1 crore price bracket.
In Delhi NCR, Noida Extension (in Greater Noida) continues to be the most searched micro locale, followed by Sector 150 (Noida) and Raj Nagar Extension (Ghaziabad). Maximum high intent online home buying activity in Noida Extension and Raj Nagar Extension is concentrated in less than the INR 50 lakh price bracket. In the case of Sector 150, most of the explorations are for apartments in the INR 50 lakh—1 crore price range.
The IT capital of India, Bengaluru, continued to hold the third spot for two months straight after slipping to the fourth position in October 2021. The city is recording maximum search queries for apartments with a 2BHK configuration in the INR 50 lakh—1 crore price range. Most of the homebuyers are looking for properties in Whitefield, JP Nagar, and Electronic City.
Bengaluru is also witnessing heightened search activity for plots. The searches for plots grew by 1.2 times YoY in December 2021. Most of the searches for plots are concentrated in Whitefield, Devanahalli, and Neelamangala. According to our report, the prices for residential plots in Bengaluru have appreciated by 13 per cent (CAGR) between 2018 and 2020.
Surat records the highest online property search volume amongst Tier-2 cities; continues to be in the top-5 cities for the fourth consecutive time
Amongst the Tier-2 cities, Surat in Gujarat has recorded the highest growth in online property volume. It has been trending amongst the top-5 cities with maximum online property searches for four consecutive months. The growth momentum has been propelled by a powerful industrial and service sector, international connectivity, and the development of physical and social infrastructure.
As per Oxford Economics, Surat, a part of the Delhi-Mumbai Industrial Corridor (DMIC), holds the first spot amongst cities across the world to witness the highest growth in the gross domestic product (GDP) between 2019-2035. The city’s rapid development into an essential economic hub in Gujarat has also catapulted the residential demand. Currently, most homebuyers are looking for apartments in localities, such as Dindoli, Vesu, and Adajan, with a 2BHK or a 3BHK configuration within the INR 50 lakh price bracket.
Apart from Surat, Coimbatore and Patna have been trending in top-10 on the IRIS index. In Coimbatore, maximum queries are for homes in Vadavalli, Saravanampatti, and Kalapatti. The majority of the homebuyers are searching for apartments with a 2BHK configuration in less than INR 50 lakh price bracket. In Patna, buyers are looking for plots and apartments with a 3BHK configuration in less than the INR 50 lakh price range. Micro locales of Danapur, Bihta and Phulwari Sharif are the most searched for buying a home in the city.
Overall, the IRIS index trends suggest that while the arrival of the third wave of the COVID-19 pandemic has clouded the overall growth outlook, the residential real estate segment is significantly well-prepared to handle the disruptions compared to the previous two waves. The vaccination being extended to various age groups, availability of booster doses, and fewer restrictions have allowed the business to continue as usual in this 'new normal.' Most developers have transitioned to digital platforms, thus retaining the buyer-seller link even amidst the local lockdowns. Having said that, the impact of the third wave is highly dependent on its severity and can only be gauged in the ensuing quarter.