Trends in Indian Residential Real Estate Post RERA & GST Scenario

A survey was carried out by a team of experts based on various aspects related to consumer perception in property purchase activities for cities like Hyderabad, Bangalore, Chennai, Pune, and Delhi NCR. This not only reflects the behavior & purchase pattern of home buyers/ investors but also enlightens the residential real estate scenario among highly-prized locations of India.

The mode of this particular survey was based on calls made to the potential buyers/ investors in residential real estate carried for three months, from June-To-August 17; i.e. Post-Rera & Post-GST scenario. A total number of 6000 calls were made, out of which 824 people showed interest in property purchase. 

The conducted survey identified some general pattern in the responses among those interested. Also, now the buyers are becoming more aware and cautious owing to GST and RERA and this is affecting their spending decision on properties as well.

Category of Home Buyers & Purpose of Purchase

According to the survey, a majority of home buyers are first time home buyers. India has a large young population. First time home buyers are mostly young professionals who have started their families and looking for a settlement. 

Maximum prospective buyers in India are looking to buy a property for self-use. The survey showed an overwhelmingly 40 % of people opted for self-use, while 7 % of people opted for investment. Another 53% of them are undecided about the purpose of purchase.

Smaller Configuration Steals The Show Again!

The survey supports the preference of apartments of smaller configuration over plotted developments. However, plots have always been popular among Indian investors. Buying a plot of land gives a bigger sense of ownership. It is a tangible asset because of a constant increase in demand and limited supply and one can be sure of boosted profits through investing in it. Although the immediate generation of cash flow through investing in plot/ land cannot be expected. This could be one reason why buyer/ investors preferred to make a shift from plots/ lands to the apartment.

The survey results are in sync with the national sentiment among home buyers. Out of 824 numbers of interested respondents, 62 % respondents opted for apartments as their preferred mode of dwelling. People mostly opted for 2/3 BHK apartments with a share of 54 % in all and 3 % opted for 1/ 2 BHK apartments while the share opted for 2/3/4/5 BHKs is only 5 %. Only 10 % of people among those interested opted for land plots/ villas/ independent house/ apartments. Rest 28 % is unsure about their preferred mode of dwelling.

Could be because, of rising land prices/ increased cost of production. People emphasize common amenities & standard lifestyle. Apartments offer all these amenities at an affordable cost which are a lot more costly & harder when one has to arrange them for an individual house. 

Luxury homes are in vogue again!

The budget preference of home buyers reflects the general pattern prevailing across India. It is quite predictable that mid-range properties have immense potential in the real estate sector. Although the supply of affordable housing still remains an issue.

When 16% of respondents have the budget for properties worth Rs 20 lakhs to 40 lakhs, 33 % prefer properties between Rs 40 lakh to 90 lakhs on the other hand. Similarly, only a sizeable bracket of the population wants to buy hi-end properties. Among interested respondents, 8 % eye properties between 90 lakh to 1 crore while 9 % are willing to spend more than 1 crore. And the other 34 % were not sure about the budget of purchase.

Quick Possession in Demand

Buyers were asked about the time period they would like for the transaction to take place. The survey shows that home buyers are looking to take possession of the houses as quickly as possible. Most of the buyers prefer shorter duration for the buying process to get over. 

11 % of respondents prefer ready-to-move-in properties or immediate possession while 14 % prefers six months of time duration for the transaction to take place. 15 % of respondents are inclined towards 6 months to 1-year duration to attain possession of the property while the other 15 % seemed okay to wait more than a year. 

Property Purchase Appreciated By Improved Infrastructure 

Finally, the respondents were being asked about their preferred choice of location in particular cities. The cities which seemed to get a good rate of responses are Hyderabad with 27 %, Bangalore with 26 % and Gurgaon with 13 %. Other 35 % didn’t specify the preferred choice of location or were undecided about it. 

The IT Sector in India is widely expanded in cities like Hyderabad and Bangalore. This could be one reason for the people in those cities to be more positive about property purchase activities. 

To Conclude

The aspect which affects buyers while opting for a specific area or location is prospective future development, enhanced connectivity to the essentials nearby and infrastructure aspects in and around the area. Also, the availability of jobs in an area is a quite notable aspect which immensely affects the property purchase activities for the same.

Also, the recent policy initiatives like RERA and GST that have boosted consumer sentiments. Now, the prospective buyers are not looking for monetary gains in pre-launch or under-construction properties. People are more concerned about the authenticity of the developers associated with the project of their interest.

With RERA and GST in place, fair business and transparency will come in practice which is obviously not an overnight business. It would surely take some time, but there is more in the store for everyone!

*The information curated from various sources.