Table of Contents
Property has emerged as the first choice for investment, among serving government employees, as well as those who have already retired, with close to half of the employees in 20 cities of India, preferring to invest in real estate, following the 7th Pay Commission’s salary hike. As many as 44% of government employees across the country, wish to invest the entire salary gains into the property market. These are the findings of an exhaustive survey on consumer behaviour patterns of government employees, by Track2Realty, a real estate think-tank group.
The major findings of the survey are:
- 44% of the government employees would invest the benefits of the 7th Pay Commission into the real estate.
- 34% of the respondents would invest in financial schemes for retirement gains; 12% to save money for education and marriage of children; and 10% would opt to upgrade their lifestyle.
- Contrary to the general perception that youngsters drive the property market, officials who are close to retirement, are more inclined to invest in property (as many as 78%).
- Metro cities with expats to attract more government officials (68%) into the property market.
- Peripheral locations and emerging markets are likely to attract more home buyers (as many as 74% of the respondents).
- Lack of affordable housing and the possibility of inflation, are the major deterrents for investing in real estate.
The study found that the main city areas are likely benefit less, as compared to the outskirts, owing to affordability, the urge for a relaxed lifestyle amidst open spaces and appreciation potential. With retirement in mind, as many as 74% of those who are investing in the property market, prefer emerging locations rather than established markets. Even those who have retired, prefer these locations, with a majority of them are already living in such regions.
The quest of property is more among the older generation, compared to young buyers. While one-fourths of the young generation (as many as 22%), wish to upgrade their lifestyle first and then diversify their portfolios, 78% of those above the age of 45 years wish to invest in the property market. A majority of the employees in the survey were closer to retirement and only a small set were below 30 years of age.
Investment options and concerns
While real estate emerged as the first choice of investment, 34% of the respondents said they would invest in financial schemes with fixed returns, post retirement. Education and marriage of children came next, with 12% saving the 7th Pay Commission’s benefits for it and the remaining 10% said they would like to upgrade their lifestyle. The survey noted that nearly all of the respondents wish to avoid speculation, even with their investment in the property market.
As many as 74% of those planning to invest in property, did not have a house of their own, while 22% said they would be investing in a second property for rental income. Only 4% said they would invest in a weekend home.
Less than one-third of the respondents (30%), felt that the 7th Pay Commission’s benefits would improve consumer sentiment. The biggest deterrent to investing in the property market was the absence of affordable housing options (55%), while 45% were apprehensive that inflation would eat up the benefits.
The survey demography was a carefully chosen mix of government employees across hierarchy. The survey was carried out in Delhi, Noida, Gurgaon, Ghaziabad, Mumbai, Pune, Nagpur, Nasik, Ahmedabad, Bangalore, Chennai, Hyderabad, Coimbatore, Kochi, Kolkata, Bhubaneswar, Jaipur, Bhopal, Lucknow and Patna.
(The writer is CEO, Track2Realty)