In a recent report by FICCI-ANAROCK, it was revealed that despite all-time high markets and high double-digit returns in mutual funds, 59 percent of respondents in India still see real estate as the most preferred investment option. The report, titled “Homebuyer Sentiment Survey – H1 2024”, highlights the changing dynamics of the Indian real estate market, with a majority of buyers (67 percent) choosing to purchase properties for personal use, while 33 percent are investing in real estate.
One key trend identified in the survey is the decrease in demand for ready-to-move homes, with the current ratio of ready homes to new launches at 20:25, compared to 46:18 in H1 2020. This signals a shift towards new projects in the market. Additionally, there is a growing preference for larger homes, with 51 percent of respondents favoring 3BHK units. While properties in the Rs45 to 90 lakh range are still popular, there is a rising interest in premium offerings, with 28 percent of buyers now preferring homes priced between Rs90 lakh and Rs1.5 crore.
The survey also highlights key buyer concerns, including timely project completion, construction quality, and well-ventilated homes. Rising rental rates in major cities are driving investor interest, with 57 percent of buyers purchasing properties for rental income. However, affordable housing is facing challenges, with over 53 percent of homebuyers expressing dissatisfaction due to location, construction quality, and unit sizes.
In terms of buyer preferences, apartments continue to dominate as the most preferred property type, accounting for 58 percent of choices. However, residential plots are gaining traction, particularly in southern cities. The survey also revealed that home loan interest rates below 8.5 percent would have little impact on buying decisions for 71 percent of respondents, while rates exceeding 9 percent would significantly influence 87 percent of potential buyers.
During his keynote address, Pramod Rao, Executive Director of SEBI, emphasized the importance of regulatory frameworks in fostering sustainable growth in the real estate sector. He highlighted the role of transparency and governance in building investor confidence and trust. Raj Menda, Chairman of the FICCI Committee on Urban Development and Real Estate, also spoke about the thriving commercial real estate sector, supported by Global Capability Centers and emerging secondary markets.
Anuj Puri, Chairman and Founder of ANAROCK Property Consultants, noted that the survey provides critical insights into the Indian property market from a consumer perspective. Sanjay Dutt, Managing Director and CEO of Tata Realty and Infrastructure, highlighted the significant evolution of the real estate sector, particularly with the emergence of smaller-scale REITs (SM REITs) and fractional ownership models, which allow investors to access high-quality assets with lower capital commitments.
