Real Estate: India's Top Investment Choice, Luxury Homes Gaining Traction
While properties in the ₹45-90 lakh range remain popular, 28% of buyers now show a preference for luxury homes priced between ₹90 lakh to ₹1.5 crore.
Real EstateLuxury HomesInvestmentFiccianarockProperty MarketReal Estate NewsOct 18, 2024
A majority, 67% of the respondents, are buying properties for personal use, while 33% are investing. However, the demand for ready-to-move homes has seen a noticeable decline. The current ratio of ready homes to new launches is 20 25, compared to 46 18 in H1 2020, indicating a shift towards new projects.
There is also a growing preference for larger homes, with 51% of respondents favoring 3BHK units. While properties within the ₹45-90 lakh range remain popular, there's a clear shift toward premium offerings. About 28% of buyers now prefer homes priced between ₹90 lakh and ₹1.5 crore.
Apartments continue to dominate as the most preferred property type, accounting for 58% of choices. However, residential plots are gaining traction, particularly in southern cities. Key buyer concerns include timely project completion (98% of respondents), construction quality (93%), and well-ventilated homes (72%).
Rising rental rates in major cities are driving investor interest, with 57% of buyers purchasing properties for rental income. On the other hand, affordable housing is struggling to meet expectations, as over 53% of homebuyers express dissatisfaction due to issues related to location, construction quality, and unit sizes.
The survey also indicates that home loan interest rates below 8.5% would have little impact on buying decisions for 71% of respondents, but rates exceeding 9% would significantly influence 87% of potential buyers.
Pramod Rao, Executive Director of SEBI, emphasized the importance of regulatory frameworks in fostering sustainable growth in the 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,' Rao stated.
Raj Menda, Chairman of the FICCI Committee on Urban Development and Real Estate and Supervisory Board of RMZ Corporation, highlighted the thriving commercial real estate sector, supported by 1,600 Global Capability Centers and emerging secondary markets. 'As the sector evolves, technological advances and interest in alternative assets like REITs and distressed properties highlight the need for diversification and alignment with global trends, positioning the industry for new opportunities,' he added.
Anuj Puri, Chairman and Founder of ANAROCK Property Consultants, said, 'The survey provides all industry stakeholders with critical insights into the Indian property market from a consumer perspective.' Sanjay Dutt, Managing Director and CEO of Tata Realty and Infrastructure, emphasized the advantages of fractional ownership, noting how it allows investors to access high-quality assets with lower capital commitments, thus democratizing real estate investment.
Frequently Asked Questions
Why do 59% of respondents prefer real estate as an investment?
Despite high returns in mutual funds, real estate is preferred for its stability, potential for rental income, and personal use. The survey reveals that 67% buy for personal use and 33% for investment.
What is the shift in homebuyer preferences in terms of home size and price range?
There is a growing preference for larger homes, with 51% favoring 3BHK units. Additionally, 28% of buyers now prefer homes priced between ₹90 lakh and ₹1.5 crore, indicating a shift toward premium offerings.
Why are ready-to-move homes seeing a decline in demand?
The current ratio of ready homes to new launches is 20:25, compared to 46:18 in H1 2020, indicating a shift towards new projects. This could be due to the preference for customization and the allure of new developments.
What are the key concerns of homebuyers in India?
Key concerns include timely project completion (98%), construction quality (93%), and well-ventilated homes (72%). These factors significantly influence buying decisions.
How are rising rental rates affecting the real estate market?
Rising rental rates in major cities are driving investor interest, with 57% of buyers purchasing properties for rental income. This trend is particularly evident in the luxury home segment.
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