Affordable Housing Woes: ANAROCK-FICCI Survey Reveals Buyer Dissatisfaction
The latest ANAROCK-FICCI survey highlights the growing dissatisfaction among affordable housing buyers due to poor project location, low-quality construction, and small unit sizes. The survey also reveals a shift in preferences towards larger homes and a
Affordable HousingReal EstateAnarockficci SurveyHomebuyersHousing MarketReal Estate NewsOct 21, 2024
According to the survey, 53% of affordable housing buyers are unhappy with the available options. Key reasons include poor project location accessibility, low-quality construction, and small unit sizes, which are major deterrents for affordable housing seekers.
Bigger homes continue to dominate demand in H1 2024, with 51% of property seekers preferring a 3BHK, according to the survey results. However, the 2BHK remains popular, with 39% of respondents opting for this setup.
A significant trend reversal noted by the survey is the declining demand for ready-to-move homes. The survey results point out that the ratio of ready homes to new launches has now shifted to 20 25, compared to a much higher 46 18 in the first half of 2020. The change is driven by homebuyers favoring projects from large, listed developers, confident they will deliver on time.
Additionally, 57% of residential property investors are focused on steady rental income, which has surged across cities due to rising rental rates—up by over 70% in prominent micro-markets.
Demand for homes priced between ₹90 lakh and ₹1.5 crore has also grown, with 28% of respondents preferring this range, up from 18% in the pre-COVID period.
The survey also notes that residential plots are gaining popularity, particularly in southern cities. Around 30% of buyers in Chennai, 29% in Bengaluru, and 27% in Hyderabad prefer plots. Villas and row houses are also in high demand in these cities, while apartments are the top choice for over 70% of respondents in the Mumbai Metropolitan Region (MMR), the National Capital Region (NCR), and Pune.
The survey highlights a sharp decline in demand for affordable homes since the COVID-19 pandemic, driven by the financial impact on this segment’s target clientele.
Anuj Puri, Chairman of ANAROCK Group, explains, 'The top three reasons why prospective affordable homebuyers are disenchanted with the currently available affordable housing supply are bad project location accessibility, questionable construction quality and poor design, and constricted unit sizes. Of the dissatisfied affordable home seekers polled in our survey, a whopping 92% respondents identify project location as the biggest grouse, while 84% state low construction quality and inferior design elements as major deterrents. 68% respondents find the available unit sizes too small to be attractive.'
The survey says that the declining demand for affordable housing has had a cascading impact on its supply in the last one year.
As per the ANAROCK data, the supply of affordable housing in major cities is shrinking, dropping from 26% of total launches in 2021 to just 17% by 9M in 2024. Before the pandemic in 2019, affordable homes made up 40% of new projects.
'Bigger homes continue to dominate buyer preferences despite spiralling prices in the last one year,' says Puri. 'Over 51% of the current survey respondents prefer 3BHK units and just 39% will settle for 2BHK options. City-wise analysis indicates that the demand for 3BHKs is particularly high in Chennai, Hyderabad, Delhi-NCR, and Bengaluru, where over 50% respondents prefer it over other flat sizes. Conversely, over 40% participants in Kolkata, MMR, and Pune name 2BHKs as their preferred option.'
While affordable housing continues to lose traction, demand for premium and luxury homes remains strong. At least 45% of respondents now prefer homes priced above ₹90 lakh, compared to just 27% in the survey’s pre-COVID 2019 edition.
Other survey highlights
- Real estate is the most preferred asset class for investment for over 59% respondents, up 2% against the previous survey.
- 66% millennials and 42% Gen-X respondents will use their investment gains for purchasing a home in the future.
- Over 67% buyers seeking property for end-use vs 64% in H2 2023 survey.
- Top homebuyer demands today include timely project completion assurance, construction quality improvement/assurance, and well-ventilated homes.
Frequently Asked Questions
What is the main reason for buyer dissatisfaction in affordable housing?
The main reasons for buyer dissatisfaction in affordable housing, as per the ANAROCK-FICCI survey, are poor project location accessibility, low-quality construction, and small unit sizes.
What type of homes are currently in high demand?
Bigger homes, specifically 3BHK units, are currently in high demand, with 51% of property seekers preferring them. 2BHK units remain popular as well, with 39% of respondents opting for this setup.
Why is the demand for ready-to-move homes declining?
The demand for ready-to-move homes is declining because homebuyers now prefer projects from large, listed developers who are more likely to deliver on time.
What is the current trend in home prices?
There is a growing demand for homes priced between ₹90 lakh and ₹1.5 crore, with 28% of respondents preferring this range, up from 18% in the pre-COVID period.
How has the supply of affordable housing changed in recent years?
The supply of affordable housing has declined significantly, dropping from 26% of total launches in 2021 to just 17% by 9M in 2024, according to ANAROCK data.
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