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Despite the challenges of escalating property prices and interest rate surges over the past year, the allure of mid-range and premium homes remains undiminished. A recent ANAROCK Consumer Sentiment Survey for the first half of 2023 showcases that a significant 59% of the 5,218 participants are inclined towards purchasing homes priced between Rs 45 lakh to Rs 1.5 crore. This marks a notable 10% surge in sentiment for this housing category compared to the survey's H1 2020 edition.
The data further breaks down the preferences, revealing that homes within the Rs 45-90 lakh bracket are the top choice for 35% of the respondents. This is closely trailed by 24% of participants favouring homes in the Rs 90 lakh to Rs 1.5 crore range.
Diving deeper into city-specific trends, the survey highlights that 3BHKs are the preferred choice in cities like Bangalore (51%), Chennai (50%), Delhi-NCR (47%), and Pune (45%). Conversely, in cities like Kolkata (52%), MMR (41%), and Hyderabad (47%), 2BHKs reign supreme.
Another intriguing shift spotlighted by the survey is the narrowing gap between the demand for ready-to-move-in properties and new launches. The H1 2023 data shows a demand ratio of 28:27 for ready homes versus new launches, a significant shift from the 46:18 ratio in H1 2020. Puri attributes this trend to the influx of new projects by renowned developers, who instill greater confidence in potential buyers due to their track record of punctual project completions.
However, it's not all rosy. The survey indicates that over 66% of respondents have felt the pinch of high inflation on their disposable incomes, a rise from 61% in the H1 2022 survey. The global inflationary trends, exacerbated by events like the Russia-Ukraine conflict, have taken a toll on disposable incomes. While the housing market hasn't shown signs of this impact yet, further inflation could potentially hamper residential sales growth.
The survey also sheds light on the potential repercussions of any more home loan rate hikes. If interest rates surpass the 9.5% threshold, a whopping 98% of respondents believe it would severely affect residential sales.
Lastly, the demand for affordable housing seems to be on a downward trajectory. The current survey indicates a dip to 25%, a decline from 40% in H2 2020 and 28% in H1 2022. The economic slowdown and inflation have particularly affected this segment, prompting a more cautious approach among potential buyers.
In conclusion, the ANAROCK survey provides a comprehensive snapshot of the current housing market trends, emphasizing the robust demand for mid-range and premium homes despite economic challenges. However, with inflation and potential interest rate hikes on the horizon, the real estate sector might face some headwinds in the near future.
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