According to a recent survey conducted by Shree Katariya & Associates (SKAA), the Indian real estate sector is showing exceptional resilience and growth in the aftermath of the COVID-19 pandemic. The survey, named "Consumer Outlook on Indian Real Estate Market- Post Covid-19 Growth Analysis," aimed at comprehending the evolving preferences and sentiments of home buyers influenced by the pandemic-induced changes.
Positive Growth Trends
Despite the uncertainties faced in the global economy, projections suggest that the Indian real estate market is likely to achieve a peak in 2023, with an estimated 2.82 lakh units sold. Forecasts indicate that by 2024, sales are expected to surpass 3,00,000 units, reflecting an annual growth rate of 10-15%.
Multiple factors have contributed to this remarkable resilience, such as government initiatives, stable economic indicators, and significant infrastructure projects, including the Smart City initiative. Additionally, low unemployment rates, manageable inflation, and noteworthy wage increases are contributing positively to the market outlook.
Changing Consumer Preferences.
The survey reveals notable shifts in buyer preferences and budget allocations since the onset of COVID-19. The rising demand for larger homes and dedicated office spaces highlights the transformation of remote work culture. Increasingly, homeownership is acknowledged as a valuable asset in investment portfolios.
Investment Preferences
For 2024, real estate has emerged as the top asset class for investment, with 58% of respondents expressing a preference for property. This sentiment is linked to the heightened importance of homeownership and the potential for high investment returns. Conversely, stocks and mutual funds garner 26% of preferences, while gold and fixed deposits attract only 4% and 12%, respectively.
Optimistic Market Outlook
A significant majority of respondents (71%) perceive the current period as an ideal time to purchase property, attributing this sentiment to the critical value of homeownership during the pandemic along with the anticipated higher returns on investment. Just 2% of participants express hesitance due to the rising property prices and personal circumstances.
Property Price Expectations
The survey results reveal widespread optimism regarding property prices, with 87% of respondents anticipating further growth. Among them, 69% expect a gradual increase, while 18% foresee a rise, albeit more slowly after the COVID-19 pandemic.
Ideal Property Types and Budgets.
Residential plots are preferred by 41% of respondents, followed by villas or row houses (27%) and flats or apartments (24%). A notable 78% of property seekers prefer properties that fall under Rs 50 lakhs, highlighting the significance of affordability.
End Users vs. Investors
Of those surveyed, 53% of respondents intend to buy property for personal use, while 47% are investors, illustrating a balanced market dynamic. Intriguingly, 67% of investors are salaried individuals, indicating a shift in investment behaviors towards long-term property ownership.
Preference for Ready-to-Move Properties.
More than 42% of respondents express a preference for ready-to-move-in properties to bypass delays and ensure prompt occupancy. As the pandemic wanes, Millennials and Generation X are beginning to gravitate towards properties at earlier stages, signifying a shift from end-users to investors.
Challenges and Opportunities
Challenges such as a lack of funds, limited knowledge regarding financing options, exploring alternatives, and personal circumstances pose significant barriers to decision-making regarding property purchases. Nonetheless, there is a glimmer of hope, as 37% of respondents are open to buying if they come across the right deal.
Summary
Anil Katariya, Founder & CEO of Shree Katariya & Associates, underscores the significance of SKAA’s survey, which provides critical insights into the evolving dynamics of the Indian real estate market. In spite of various challenges, the sector is thriving owing to changing consumer preferences, buoyant market sentiments, and attractive investment opportunities. With this information at hand, stakeholders are better positioned to make informed decisions regarding navigating the market's fluctuations.