Real Estate Surges as Top Investment Choice: FICCI-Anarock Survey
Despite robust returns in mutual funds, a recent FICCI-Anarock survey reveals that real estate has emerged as the most preferred investment option among Indians. The survey, 'Homebuyer Sentiment Survey – H1 2024', highlights evolving buyer preferences and
Real EstateInvestmentHomebuyer SentimentFiccianarockProperty MarketReal EstateOct 18, 2024
According to the survey, a majority of 67% of respondents are buying properties for personal use, while 33% are investing. However, there is a noticeable decline in the demand for ready-to-move homes. The current ratio of ready homes to new launches is 20 25, a stark contrast to the 46 18 ratio in H1 2020. This shift indicates a growing preference for new projects.
Buyers are increasingly favoring larger homes, with 51% of respondents opting for 3BHK units. Properties within the Rs 45 to 90 lakh range remain popular, but there is a growing trend towards premium offerings, with 28% of buyers now showing interest in homes priced between Rs 90 lakh and Rs 1.5 crore. Apartments continue to dominate, making up 58% of choices, although residential plots are gaining traction, especially in southern cities.
Key concerns for buyers include timely project completion (98% of respondents), construction quality (93%), and well-ventilated homes (72%). Rising rental rates in major cities are also driving investor interest, with 57% of buyers purchasing properties for rental income.
On the downside, affordable housing is struggling to meet expectations, with over 53% of homebuyers expressing dissatisfaction due to issues related to location, construction quality, and unit sizes. The survey also indicates that home loan interest rates below 8.5% 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 Chairman of the Supervisory Board at RMZ Corporation, noted 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, highlighted the survey's value in providing critical insights into the Indian property market from a consumer perspective. Sanjay Dutt, Managing Director and CEO of Tata Realty and Infrastructure, emphasized the sector's significant evolution, particularly with the shift from traditional REITs to smaller-scale REITs (SM REITs). 'Fractional ownership allows investors to access high-quality assets with lower capital commitments, democratizing real estate investment,' Dutt noted.
Frequently Asked Questions
What percentage of respondents chose real estate as the most preferred investment option?
59% of respondents chose real estate as the most preferred investment option according to the FICCI-Anarock survey.
What is the current ratio of ready homes to new launches?
The current ratio of ready homes to new launches is 20:25.
What percentage of buyers are purchasing properties for rental income?
57% of buyers are purchasing properties for rental income.
What are the key concerns for buyers in the real estate market?
Key concerns for buyers include timely project completion (98%), construction quality (93%), and well-ventilated homes (72%).
How are affordable housing units performing according to the survey?
Affordable housing is struggling to meet expectations, with over 53% of homebuyers expressing dissatisfaction due to issues related to location, construction quality, and unit sizes.
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