Real Estate Stands Out As The Top Investment Preference Among Indians, Says Survey

Real estate remains a popular investment option for many people, according to the Homebuyer Sentiment Survey- H1 2024 conducted by FICCI-ANAROCK. Despite the stock market's peak performance and the allure of mutual fund returns, the study finds that 59 per cent of participants prefer real estate over other investment possibilities. It seems that 67 per cent of participants say they are purchasing homes for personal use highlights the strength of the Indian real estate market, which is primarily driven by end users.

According to the survey, there has been a significant decline in the demand for ready-to-move-in homes, which can be attributed to a shift towards new construction projects. The ratio of ready homes to new launches is currently 20:25, which is a significant change from 46:18 in the first half of 2020. These findings provide important insights into buyer behavior and market trends. This trend indicates growing confidence among buyers in the completion of under-construction properties.

When price is taken into account, homes in the Rs 45-90 lakh range appeal to almost 35 per cent of prospective buyers, making them the most sought-after. With 28 per cent of respondents stating they would prefer to live in a property that costs between Rs 90 lakh and Rs 1.5 crore, there is a clear trend towards higher-end alternatives. Also, more people are favouring larger homes, 51 per cent of respondents said they prefer 3BHK flats.

The top three priorities listed by buyers are still timely project completion, well-built construction, and well-ventilated places, these are ranked by 98 per cent, 93 per cent and 72 per cent of respondents, respectively. With 57 per cent of purchasers saying they are buying properties for rental income, rising rental prices in key cities are also impacting investor interest.

When making purchases mortgage rates are a major factor. Around 90 per cent of respondents to the survey said they thought that if mortgage rates went beyond 9 per cent, it would have a big influence on their choice to buy. 71 per cent of respondents would not be impacted if rates remained below 8.5 per cent. The requirement for stability in the lending environment as the market changes is highlighted by this sensitivity to interest rates.

Pramod Rao, Executive Director of SEBI emphasized the importance of regulatory frameworks during a recent FICCI event. He stated, "Investor confidence is vital for the industry's long-term success, and SEBI’s focus on transparency and governance has been key in building this trust."

Raj Menda, Chairman of the FICCI Committee on Urban Development and Real Estate and Chairman of the Supervisory Board at RMZ Corporation, stated, "The commercial real estate sector is also thriving, supported by 1,600 Global Capability Centers and emerging secondary markets."

He added, "As the sector evolves, technological advances and interest in alternative assets like REITs and distressed properties highlight the need for diversification and alignment with global trends, positioning the industry for new opportunities."

Anuj Puri, Chairman of Anarock, stated, “The survey provides all industry stakeholders with critical insights into the Indian property market from a consumer perspective."

At last, the FICCI-Anarock survey demonstrates shifting buyer trends and the durability of India's real estate industry.