Over 50% consumers want to buy a new home in next six months: JLL3 min read . Updated: 29 Jul 2020, 03:32 PM IST
- When asked to choose between buying and renting, 91% respondents wanted to buy a home
- Additionally, 67% believed that buying a home is a necessity, not a luxury
Mumbai: Over 50% of consumers are considering buying a new home in the next six months, according to a survey by JLL, India’s largest real estate consultancy firm.
JLL’s Homebuyer Preference Survey, which saw participation from 2,500 professionals across Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai and Hyderabad, was conducted during June-July.
When asked to choose between buying and renting, 91% respondents wanted to buy a home. Additionally, 67% believed that buying a home is a necessity, not a luxury.
The evolving covid-19 pandemic will also influence short-term decision making with job security cited as the biggest concern when contemplating the purchase of a home.
However, a greater proportion of people in the age group of 20-35 years were likely to defer their home purchase plans by more than six months. Consumers above 35 years indicated that they are more inclined towards buying a property in the next six months.
Also, more than 50% of the prospective homebuyers indicated a preference to buy a 2 BHK apartment with size ranging from 800 to 1,000 sq ft.
“Real estate has emerged as the most resilient asset class today and we see potential for more consumers to pivot towards home ownership in the longer-term. In tandem, ongoing work from home arrangements are pushing developers to become more flexible and give homebuyers the option of creating a study room if need be," said Ramesh Nair, CEO & Country Head (India), JLL.
Affordable and mid segments, however, will continue to drive the market. Most respondents indicated a preference for properties in the sub ₹50 lakh and ₹50-75 lakh category. On the supply side, developers have also realigned their products, with 60% of the new launches in the past two years falling in the ₹50 lakh and ₹50-75 lakh price segments, said JLL.
The alignment of demand and supply will support the recovery process and it is expected that the affordable and mid-price segments will continue to witness maximum traction in the post-covid era as well, according to the consultancy firm.
The pandemic has, however, also accelerated the pace of digital transformation amongst developers and intermediaries. "In the past, we’ve seen project discovery happen online, this moved to virtual tours and interactions, and now one-fifth of the respondents in this survey said they’re digital-ready to affect their transaction online end-to-end," he added.
While the requirement of study rooms as work from home practices are adopted is a key highlight of the study, the importance of healthy living is gaining currency as societies with wellness amenities are being favored.
Homebuyers want to mitigate the risk and are willing to pay a premium for properties from reputed developers, showing an affinity towards ready-to-move-in properties in gated societies and township projects.
“It is encouraging that more than 50% of the prospective homebuyers surveyed have expressed their readiness to potentially buy homes within the next six months. At the same time, developers are relatively flexible to allay buyers’ concerns in this fragile business environment with respect to immediate cash outgo and long-term financial obligation by offering attractive flexible payment options with minimum upfront payment," said Samantak Das, Chief Economist and Head Research & REIS, JLL.
The markets of Hyderabad, Pune and Chennai provide indications of relatively healthy inventory management in terms of average construction period and years-to-sell or YTS.
Further analysis reveals longer-term resilience might appear first in the southern markets of Bengaluru and Chennai.
The larger markets of Delhi-NCR and Mumbai have high levels of unsold inventory in various stages of construction as well as greater YTS due to a prolonged slowdown in sales. The proportion of prospective homebuyers who deferred their home purchase decisions by more than six months is also higher in these larger markets, the study highlighted.