Housing.com’s IRIS index, which is a leading indicator of upcoming residential demand in 42 key Indian cities, has reached an all-time high in January 2022. The index has picked up since December 2021 and jumped to 131 points in January 2022. The growth comes on the back of home buyers returning to the market as the end is in sight for a less severe COVID-19 third wave.
The improving economic activity, expansion of vaccine coverage and less curbs during the third wave have all lent optimism to the homebuyers who are more confident about the economic and income scenario for the coming months. Corroborating with this, the current sentiment index as per RBI’s consumer sentiment survey is at a 10-month (63.7 points). This index gauges the consumer sentiments on the general economic situation, employment scenario, overall price situation, and income and expenditure.
Moreover, despite the third wave, the services and manufacturing PMI remained in the expansion zone (above-50 mark), unlike the first and second waves when these indices slid into the contraction zone. The unemployment rate fell to an 11-month low in January 2022. The positivity in markets has encouraged home buyers to resume their searches after trepidation over the Omicron variant.
In January 2022, the majority of online home buyers searched for apartments with a 2BHK configuration. However, the queries for independent homes have also seen a significant YoY uptick driven by the increased searches for this property type in the Tier 2 cities. In fact, the share of Tier 2 cities has grown to 40 per cent in January 2022 compared to 25 per cent in the same period the previous year. The rising interest can be attributed to several organisations adopting remote and hybrid working models, giving their Tier 1 employees the flexibility to move to their hometowns.
Hyderabad displaces its southern counterpart Bengaluru; regains the third spot on the IRIS index after 11 months
Hyderabad recorded the highest jump in rank by seven points amongst the major cities and reached the third spot on the list of top-20 cities witnessing maximum online high-intent homebuyer activity in India. The rising online property search volume corroborates the growth in residential sales in the city. Hyderabad recorded 36 per cent YoY growth in residential demand in 2021, the highest amongst the Tier-1 cities after Ahmedabad.
Most homebuyers in Hyderabad are searching for homes in the INR 50 lakh-1 crore price category, followed by INR 1-2 crore price range. Properties with 2BHK and 3BHK configurations are most searched for in Hyderabad. The bulk of the queries are for buying homes in the micro-markets of Kukatpally, Kondapur, and Miyapur. The city overtook its southern counterpart Bengaluru, which was consistently placed amongst the top-5 cities witnessing maximum online property search volume in 2021.
Bengaluru slipped by one position from last month and is currently at the fourth spot. Homebuyers in the IT capital of India are searching for homes in the eastern and southern locales of Whitefield, Electronic City, and Krishnarajapura. Most of the queries in Bengaluru are for apartments with a 3BHK configuration in INR 50 lakh-1 crore price range.
Bhopal, a Tier-2 city, positioned itself sixteenth on the IRIS index for the first time on the list of top-20 cities recording maximum online high-intent property search volume. The city, which is the state capital of Madhya Pradesh, has witnessed strong economic development in recent years.
The establishment of special economic zones and the development of investment corridors by the state, such as Bhopal-Indore and Bhopal-Bina, have underpinned the city’s manufacturing and services sector along with augmenting the connectivity with the regional nodes. Bhopal also has an international airport. Along with regional and international connectivity, there is also a focus on improving liveability through physical and social infrastructure through smart city projects to complement the city’s economic development.
The current socio-economic progress has catapulted the residential demand in the city as more and more homebuyers are actively searching for properties in Bhopal. Maximum buyers are searching for independent homes with a 3BHK configuration and plots in the city. The online queries are majorly for properties in the less than INR 50 lakh price bracket. Homebuyers are looking for properties in the localities of Kolar Road and Bagmugalia in the south and along Ayodhya Bypass in the north.
Amongst the Tier-2 cities, Meerut registered the highest jump in its rank after Bhopal. The city is currently at the eleventh position and has been recording maximum search queries for independent homes with a 3BHK configuration and residential plots. Most of the online search queries are for properties in less than the INR 50 lakh price bracket. Micro locales of Ganga Nagar, Modipuram and Kanker Khera are most searched for buying property in Meerut.
The overall insights and trends suggest that the residential market in India is coming out of the pandemic shadows. Consumer sentiments have been dampened for the last two years due to uncertainty over the pandemic and the severity of the first two waves. However, as we enter 2022, the wide coverage of vaccination and a mellowed impact of the third wave has only boosted the homebuyer confidence fuelling the pent-up demand. The IRIS index mirrors the optimism in the market as online searches and queries for buying a home reached a historic high. The heightened online property search activity signals growth in residential demand in the coming quarters.
