What's Holding Back Consumers from Their Homebuying Dream? Exploring the Key Challenges

The journey of buying a home, a significant milestone in one’s life, has always been marked by numerous considerations and challenges. The decision to purchase a home is often one of the most significant financial commitments individuals make in their lifetime, and as such, it demands careful thought and consideration. The process of buying a home requires prospective buyers to navigate a complex web of choices, from selecting the right location to deciding on the type of property that suits their needs. Factors such as budget constraints, family size, preferred amenities, and proximity to work or schools all come into play.

Challenges Holding Back Buyers

According to our consumer sentiment survey for the upcoming six months, a striking majority of prospective homebuyers find themselves grappling with the formidable task of finding a property that aligns with their budget and location preferences.

In the top eight cities, a staggering 52 percent of individuals surveyed have expressed their inability to locate a property that ticks all the boxes – matching their desired location, budget constraints, and amenities requirements.

This challenge has left many home seekers in a dilemma, prompting them to adopt a cautious “wait and watch” approach while navigating the complex real estate landscape.

Stage of Purchase — Research Desk | Housing News

Preference For RTMI Properties Creating a Paradox

The current real estate market landscape primarily caters to end-users, who prioritize immediate possession to avoid the anxiety and uncertainty associated with waiting for project completion. This preference for properties that require no additional waiting or construction time appears paradoxical as, despite the strong demand for such properties, there are relatively few of them available in the real estate market.

As per our data, a mere 20 percent of the 9.44 lakh unsold units within the primary market falls into ready-to-move-in (RTMI) category.

With a mismatch between immediacy in homeownership and the limited supply of RTMI properties, developers are capitalizing on this situation by charging a premium, leading to a significant annual uptick in property values for this segment. This price surge further exacerbates the challenge of finding the right property within one’s budget.

The Urban Lure: Convenience and Connectivity

While more affordable properties do exist in peripheral areas, they often face issues related to accessibility, amenities, retail options, and overall infrastructure. Consequently, potential homebuyers are increasingly leaning towards properties located near the city, given its various advantages. The allure of a well-connected location with a range of amenities within arm’s reach is proving irresistible for many, despite the potential compromises in terms of space or budget.

Critical Need to Meet Diverse Homebuyer Demands

Post-pandemic sales trends and consumer insights have shed light on a clear pent-up demand in the property market. Evidence of this demand surge can be found in the significant 15 percent year-on-year increase in property sales during the first half of 2023. However, to harness this demand fully and entice the fence sitters to take the plunge into homeownership, there is a critical need for a more diverse supply of properties that closely align with consumer preferences in terms of budget, location, and amenities.

Thus, while the homebuying journey is evolving, prospective buyers are faced with challenges in finding the right property in the right location. The demand is evident, but the supply needs to adapt to meet consumer preferences. Developers, policymakers, and industry stakeholders must work together to bridge this gap and provide more options that adhere to the diverse needs of today’s homebuyers. We believe that by resolving this matter, the aspiration of owning a home would remain within reach and be fulfilling for everyone.

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