More than 95 per cent of prospective homebuyers feel that a further increase in interest rate on home loans will affect their purchase decisions, according to a CII-Anarock survey.
A total of 4,662 people participated in the survey carried out jointly by industry body CII and real estate consultant Anarock. The report ‘The Housing Market Boom’ was released on Tuesday at the 5th edition of the CII Real Estate Confluence 2023 in Mumbai.
”96 per cent surveyed buyers confirm that further home loan rate hike will affect housing demand…Higher home loan rates will affect their homebuying decisions in the future,” Anarock said in a statement.
The RBI in its recent monetary policy kept the repo rate unchanged, contrary to the market expectations.
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For over 80 per cent property seekers, price remains an important factor as apart from home loan rates, the basic cost of property has been on the rise in the last one year.
Among other findings, the report said consumer sentiment for bigger homes continues unabated with 42 per cent of participants preferring 3BHK, 40 per cent 2BHK, 12 per cent 1BHK, and 6 per cent seeking homes exceeding the 3BHK configuration.
Over 45 per cent property seekers in NCR are looking to buy 3BHK homes in the near future. In the expensive MMR (Mumbai Metropolitan Region), 2BHK appears to dominate the preference chart of 43 per cent of respondents in this region, but over 32 per cent buyers there are looking to buy 3BHK.
The survey also found that 58 per cent home seekers are looking to buy property priced between Rs 45 lakh and Rs 1.5 crore. At least 36 per cent respondents prefer a home that will be ready within a year.
Anarock Chairman Anuj Puri said, ”Rate hikes are just a part of the overall demand scenario. Recent layoffs by both large and small corporates are likely to have at least some impact on the demand in the upcoming two quarters, and dent growth in the housing market.” ”Many homebuyers impacted by layoffs may defer homebuying decisions until their employment situation stabilizes. Nevertheless, buying homes remains the top priority for everyone,” he added.
Currently, inflation is high and the state of the global economy directly or indirectly impacts housing demand in India, he said.
”There are high chances that by FY25, the current turbulence will have passed and the housing market will bounce back,” said Puri. ”Deferred demand is just that – it is put on hold, not destroyed.” The report further found that millennials continue to drive housing demand.
Of total participants who chose real estate as an asset class for investment, at least 52 per cent were millennials who are mainly looking to buy homes for self-use. End-users still dominate the Indian housing market, with end-user vs investor ratio at 71:29. Of the total surveyed end-users, over 77 per cent are millennials.
Apart from price points and basic amenities in a project, the surveyed buyers are now focused on three primary aspects – timely project completion assurance, the availability of a study room, and adequate ventilation in the property.
Over 90 per cent of the surveyed homebuyers will not compromise on timely project completion, 62 per cent insist on well-ventilated homes, and another 55 per cent respondents consider a study room indispensable.
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