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Demand for larger residential spaces increases despite inflation concerns, shows survey

The residential market continues to be dominated by end-users, with 69% of respondents looking to buy homes for self-use and 31% for investment, as per the report.Premium
The residential market continues to be dominated by end-users, with 69% of respondents looking to buy homes for self-use and 31% for investment, as per the report.

  • Demand for 3BHKs has outstripped that of 2BHKs for the first time, with at least 44% of respondents showing a preference for the former while 38% favoured 2BHKs, as per the CII-Anarock survey

Despite inflation impacting the purchasing power of people, demand for larger spaces in residential property is growing each year, shows a survey by Anarock Property Consultants and Confederation of Indian Industry. 

Demand for 3BHKs has outstripped that of 2BHKs for the first time, with at least 44% of respondents showing a preference for the former while 38% favoured 2BHKs, as per the CII-ANAROCK Consumer Sentiment Survey - H1 2022. This number has gone up from 40% for 3BHK last year, while declined from 46% voting for 2BHK last year. 

The report points at an overall growing appetite for larger spaces as the demand share for 4BHKs has also risen from 2% in the pre-Covid survey to 7% now. 

The survey polled 5,500 participants and was conducted between January and June 2022.

This trend is noteworthy at a time when high inflation is a major cause of concern for respondent homebuyers. “About 61% declared their disposable incomes as ‘majorly impacted’. Most survey participants (92%) predict that the economy will either stay at current levels or marginally improve over the next 12 months," the report said.

 “The demand for homes priced >INR 1.5 Cr continues to grow," said Anuj Puri, Chairman – CII Real Estate Knowledge Session on Tapping the Consumer Beat and Chairman - ANAROCK Group. 

 “Compared to the pre-Covid 2019 survey, there has been a 4% rise in the vote share for these homes – from 6% pre-Covid to 10% in H1 2022. Buoyed by the increasing demand for luxury homes, developers have also significantly increased the new supply in this category in H1 2022. ANAROCK data reveals that 33,210 units priced INR 1.5 Cr and above were launched across the top 7 cities in H1 2022. Contrastingly, H1 2019 saw just 16,110 units launched in this segment."

Preference for real estate as an investment has also grown from last year with 59% respondents showing preference to invest in real estate this year, against 54% last year. 

“Interestingly, investors with an 8–10-year investment horizon have the most positive outlook in H1 2022. More than half of respondent investors feel that the current housing market is a better investment proposition than it was 12 months ago," the report said. 

The residential market continues to be dominated by end-users, with 69% of respondents looking to buy homes for self-use and 31% for investment, as per the report.

 “The pandemic effect on home sizes continues - larger spaces in non-core urban areas remain in higher demand across the top cities. The reopening of offices and schools has changed little about this trend - as the increasing demand for the 3BHK configuration over 2BHKs vouchsafes," said Puri.

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