A New Era for Homebuyers in India

In a compelling update on the state of the Indian real estate market, the Federation of Indian Chambers of Commerce and Industry (FICCI) and ANAROCK Property Consultants have released their “Homebuyer Sentiment Survey – H1 2024.” This report sheds light on the significant changes in homebuyer preferences and market dynamics, revealing a sector that is not only resilient but also adapting to the evolving needs of consumers.

Real Estate: The Preferred Investment Choice

The survey underscores that real estate continues to reign as the most favored asset class for investment among Indian buyers, with 59% of respondents indicating a preference for property. This confidence reflects a strong belief in the long-term value of real estate, further bolstered by a growing awareness of the market’s stability.

End Use vs. Investment: A Changing Demand

Interestingly, the report highlights a shift in buyer intentions, with 67% of respondents seeking properties for end-use purposes, while only 33% are looking to invest. This trend signals a growing emphasis on homeownership and the desire for stability in living situations, particularly in the face of fluctuating economic conditions. However, demand for ready-to-move-in homes has seen a notable decline. The current ratio of ready homes to new launches stands at 20:25, a stark contrast to the 46:18 ratio recorded in H1 2020.

A Preference for Larger Spaces

In terms of property specifications, 51% of respondents are leaning towards 3BHK units, indicating a clear shift towards larger living spaces. This preference may reflect changing family dynamics and a post-pandemic reassessment of living arrangements. The survey also reveals that the most popular budget range for homebuyers remains between Rs 45 and Rs 90 lakh, capturing 35% of preferences. However, there is a notable trend towards premium properties, with 28% now favoring homes priced between Rs 90 lakh and Rs 1.5 crore.

Confidence in Developers and Regulatory Measures

Sandip Somany, Past President of FICCI and CMD of Somany Impresa Group, commented on the report’s findings, stating, “The Indian real estate sector has shown remarkable evolution. The significant shift in consumer preferences away from ready-to-move homes towards under-construction properties indicates growing confidence in developers and the regulatory environment.” Somany attributes this transformation to the positive impact of regulatory measures like the Real Estate (Regulation and Development) Act (RERA), which has played a pivotal role in enhancing buyer confidence.

The Role of Regulation in Market Growth

Echoing Somany’s sentiments, Pramod Rao, Executive Director at SEBI, emphasized the crucial role of regulatory frameworks in fostering sustainable growth within the real estate sector. “Investor confidence is vital for the industry’s long-term success, and SEBI’s focus on transparency and governance has been key in building this trust,” he stated. Rao highlighted that strong compliance and better disclosures will be essential in attracting institutional investments, ensuring a more robust and transparent market.

A Market in Transition

The findings of the “Homebuyer Sentiment Survey – H1 2024” paint a picture of an Indian real estate market in transition. With homebuyers prioritizing end-use properties and larger living spaces, and a growing inclination towards under-construction homes, the market is showing signs of maturation. As confidence in regulatory frameworks continues to build, the future of India’s real estate sector looks promising, paving the way for sustainable growth and increased investor interest.

This evolution not only reflects changing consumer preferences but also underscores the resilience of the sector in adapting to new challenges and opportunities. As we move forward, it will be essential to monitor these trends to understand their implications for buyers, developers, and investors alike.