85 Percent First Time Buyers Pave Way for Realty growth in 2021
The Indian real estate sector has always remained an investor’s favourite which has shown immense resilience against the pandemic. Continuing its uphill climb against all odds, the sector continues to attract potential buyers.
These positive sentiments were reflected in a recent ANAROCK report which said that in the nine months between July 2020 and March 2021, 85 per cent of homebuyers in the NCR market were first-timers.
“During volatile times, buyers pursue comfort and steadiness, and the prevalent demand for real estate has established that there is an appeal for stable assets in an otherwise unstable economy. The industry has shown indomitable resilience against the pandemic and has transformed it into a buyer’s market,” said Aakash Ohri, Sr Executive Director, DLF Home Developers Ltd.
“2020 actually brought the fence sitters to the market. The pandemic directed the demand for residential real estate moving beyond the metros, to mini metros, and tier II and III cities. Catering to the demand beyond Delhi NCR region, we witnessed a sharp rise in sales of residential projects in key cities like Lucknow, Indore, Shimla, Kasauli and Tri-city in Punjab, with diverse offerings – from plots to ready-to-move-in units. Between November 2020 and January 2021 alone, we did three back-to-back successful launches in Gurgaon. These were all plotted developments – close to 150 independent floors sold for over 500 crores, followed by similar launches in DLF City Phase 1 to 4 in Gurgaon and in New Gurgaon region,” Akash Ohri further added.
As per the total housing sales of 21,750 units in NCR during these nine months, around 90% buyers were end-users and 10 per cent investors. With these promising numbers, leading real estate developers are confident that the demand in the resilient real estate sector will get stronger once lockdown restrictions are lifted.
“At present, affordability and financing cost are at the lowest point in this century, acting as a catalyst, reducing inventory overhang in not only ready inventory but also under development stage projects; while new launches have considerably reduced thereby bringing supply down. Not to mention, lockdown caused by COVID has made people realise the importance of a home including its size and amenities. Therefore, the experience of this pandemic (COVID) may make people invest heavily in real estate in the given time, increasing demand for housing, and coming years may witness revival of affordable luxury segment in real estate,” Rajan Gupta, Vice President – Business Development and Corporate Strategy, Omaxe Limited. As per the ANAROCK report there has also been a sharp incrase in demand for an additional 1/2 room for creating a mini office, study room, yoga, gym etc.
As movement is now restricted due to COVID-19 there is rise in demand for 2.5 BHK and 3.5 BHK homes where the homebuyers are looking to convert the additional space as per their need and requirements.
“Homebuyers these days prefer residences that can accommodate ‘space’ for remote working, with more outdoor open spaces, and gated communities having state of the art amenities. Customization of space has been expanded to such an extent that developers are offering complete open floors and designing them as per homebuyer’s requirements from a range of standout design options. This shift in preference is largely because of the COVID-19 pandemic and its socioeconomic impact. First-time homebuyers who are now investing in residences not only for investment purposes but also keeping in view the safety and security aspects of their families. Work from home (WFH) as the ‘new normal’, has skewed homebuyers’ preference towards 2LDK + personal workspace that has led to the emergence of a ‘new asset class’ from an investment perspective. This new product offering is perfectly suited for the WFH lifestyle preferred by millennials, global professionals, and the expat communities,” said Ashok Kapur, Chairman – Krisumi Corporation & Krishna Group.
According to ANAROCK, affordability, bottomed-out prices, stamp duty cut and low home loan interest rates have resulted in the increased demand. In addition, the NCR region where property prices are comparatively higher was the preferred choice among first-time buyers and attracted buyers from neighboring cities also. In the luxury segment, 75 percent preferred ready to move in spaces and 20 per cent went for spaces that are due to complete in two years.
“Customer-centricity has taken a key position in the market which will ultimately result in better customer satisfaction. Buyers are now well-aware of the latest and global trends and are willing to go an extra mile for their dream house for an opulent lifestyle. Residential spaces that incorporate a dedicated workspace, large functional areas for exercises or entertainment, study rooms, outdoor spaces are on their wish list. Technology is playing a key role and developers are offering modern amenities like contactless sensors, hi-tech safety and surveillance systems, etc to match modern buyers’ expectations,” Ashish Sarin, CEO, AlphaCorp.
“The developers are in a much better position and expect a rapid revival in customer sentiments with mass inoculation drives and lowering of infection rate. The homebuyers enjoy major capital gains on their investment in the long run and rentals are also a strong addition that adds value to their overall incomes. Interestingly, no prime market in the country has shown any downward movement in prices in spite of the severe pressure and it will bring more traction in investments. The real estate has always remained resilient and buyers look at the segment as a long-term investment. As soon as lockdown restrictions are lifted, the segment will continue its uphill climb in the near future,” said Mukul Bansal, Director, Motia Group.
With new infrastructure upgrades, improved liveability index, and excellent connectivity, peripheral areas have also become attractive choices. Many homebuyers are now upgrading to larger homes in non-central locations.
Amid the extended-work-from culture, a rise in tech-savvy millennial customers has changed the perceptions and has enabled developers to come up with offerings with modern amenities matching global standards, setting new benchmarks in the housing segment. Increased foreign investments have also buoyed sentiments of the residential segment.