India’s online property search volume at a 11-month low

Housing.com’s IRIS index, a leading indicator of upcoming property demand, reached an 11-month low in May 2022. The index eased for the second time straight, reaching 93 points, albeit remains above the bottomed-out levels of 87 points registered during the year-ago period, marred by the second wave of the COVID-19 pandemic. The easing of the IRIS index is in line with the impact the current geopolitical conflict is having on macroeconomic indicators. For instance, at 7.04 per cent, retail inflation remains outside the central bank’s target band of 2-6 per cent. The unemployment rate is pegged at 7.12 per cent. The Reserve Bank of India’s consumer sentiment index for future outlook has eased sequentially to 113 points in May 2022 from 115 in February 2022. Also, the central bank has hiked the repo rate to 4.40 per cent from the all-time low of 4.0 per cent in May 2022.

However, the services and manufacturing Purchasing Manager’s Index (PMI) has remained above the 50-mark in May 2022. Housing.com’s homebuyer sentiment survey suggests that 63 per cent of the consumers are confident about their future earnings. Also, 47 per cent of the consumers opined that real estate continues to be the preferred asset class, which suggests a positive turnaround for the sector in the ensuing months. The insights from search and queries in May 2022 indicate that homebuyers across the key cities of India continue to look for properties with a 2BHK configuration in the INR 50 lakh-1 crore price bracket in Tier 1 cities and less than INR 50 lakh in Tier 2 cities.

Bengaluru has maintained the third spot on the IRIS index for three months straight

Bengaluru maintained its third spot on the IRIS index in May 2022 for the third month straight after losing it to Hyderabad in January and February of this year. The majority of the buyers in the IT capital of India are searching for apartments in localities such as Whitefield, JP Nagar, and Bellandur. Homebuyers are looking for properties with a 2BHK and 3BHK configuration in INR 50 lakh-1 crore price bracket. The share of searches and queries for plots in the city has increased to 15 per cent in May 2022 as compared to 7 per cent in the same period the previous year.

While Bengaluru continues to hold its rank, its southern counterparts of Hyderabad and Chennai have registered a dip in their ranks on the list of top 20 cities with maximum online property search volume. Hyderabad slipped by two positions reaching the 8^th position on the IRIS index. Homebuyers in Hyderabad are searching for properties in the locales of Krishna Reddy Pet, Bachupally, and Kondapur with 2BHK and 3BHK configurations. Most of the searches and queries in the city are concentrated in the price bracket of INR 50 lakh-1 crore, closely followed by INR 1-2 crore price range.

In the case of Chennai, which currently holds the 16^th position on the IRIS index, maximum searches and queries were for apartments located in the micro markets of Avadi, Madipakkam and Maraimalai Nagar. Properties with 2BHK and 3BHK configurations in INR 50 lakh-1 crore were most searched for in Chennai during the month of May.

Ludhiana has maintained its position among the top 10 cities with maximum online property search volume since the beginning of 2022

In Tier 2 cities, Ludhiana, a city in Punjab, has maintained its position in the top 10 cities, witnessing maximum high-intent online property search activity in the past five months. The city has received a major boost for infrastructure under the Smart City mission and several state-led schemes in the last decade, with a focus on IT connectivity, e-governance, citizen participation, redressing environmental pollution, clean water, and sanitation. The ongoing physical and social infrastructure development has catapulted the property demand in the city, with homebuyers searching for independent homes, villas, and plots. The majority of the search queries are concentrated in locales such as Jhotwara, Vaishali Nagar, and Mansarovar in the less than INR 50 lakh price bracket.

In May 2022, the online property search volume has moderated, illustrating the impact of inflationary pressures and tepid sentiments owing to the ongoing geopolitical conflict in the Indian property markets. However, the easing global uncertainties and leading indicators showing resilience amidst the current scenario continue to lend optimism to the residential real estate sector in the coming months. Having said that, the hike in property prices and rise in interest rates will continue to overshadow homebuyers’ sentiments to some extent.

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Renuka Kulkarni - Research Desk

Renuka Kulkarni, a seasoned real estate professional, brings over five years of diverse experience in research, consulting, and architectural design within the urban sector. Her expertise spans public and private projects, showcasing proficiency in real estate research, trend interpretation, and policy analysis. With qualifications in architecture and a master’s degree in Data Science (Business Intelligence & Data Analytics) from IIIT Bengaluru, along with an M. Tech in Urban Development and Management from TERI School of Advanced Studies, New Delhi, Renuka seamlessly blends data analytics with market insights, offering a holistic understanding of the industry in her research pieces.