According to a recent FICCI-Anarock survey, more than 67% of people buying real estate today are doing so for self-use, marking a clear preference to buy property for self-use over investing. Despite real estate remaining a popular asset class for over 59% of people, there has been a notable shift in buyer behavior, with investors pausing purchases due to rising prices. The survey, conducted between January and June 2024, highlights significant trends in the real estate market across India’s top cities.
Homeownership on the Rise
The survey found that 67% of respondents chose to buy property for self-use, an increase of 3% compared to the previous year. This uptick reflects a growing sense of security associated with homeownership, as many seek to establish stable living arrangements amidst fluctuating property prices. This shift is part of a larger trend, as end-users dominate the market while investors take a breather.
Interest in Affordable Housing Declines
Despite the demand for property, affordable housing is struggling to meet expectations. Over 53% of homebuyers expressed dissatisfaction with the current offerings, citing issues related to location, construction quality, and small unit sizes. This dissatisfaction has led many potential buyers to buy property for self-use in other segments, particularly in the premium and luxury categories.
Impact of Rising Interest Rates
The survey also revealed how rising mortgage rates impact buying decisions. For 71% of respondents, interest rates below 8.5% have little impact on their decision to buy property for self-use. However, if rates exceed 9%, 87% of potential buyers would reconsider their options. This suggests that the real estate market could slow down if borrowing costs continue to rise.
Investors Take a Breather
While more than 33% of respondents still plan to purchase real estate for investment purposes, the share of investment-focused buyers has dropped by 3% compared to last year. Rising prices have led many investors to hold off, while others focus on buying property for self-use to secure long-term capital gains.
Growing Demand for Larger Homes
More buyers are prioritizing spacious homes, with 51% preferring 3BHK units. This reflects changing lifestyle needs, with many choosing to buy property for self-use that offers more living space. Additionally, luxury homes are gaining traction, with 45% of buyers now seeking homes priced over ₹90 lakh.
Apartments Dominate, but Plots Gain Popularity in South India
Apartments remain the most preferred type, with 58% of respondents opting for them. However, residential plots are gaining ground, particularly in southern cities like Chennai, Bengaluru, and Hyderabad. This trend indicates a growing preference among buyers who want to buy property for self-use in quieter, more open areas.
Conclusion
As India’s real estate market evolves, the shift toward buying property for self-use is becoming more pronounced. Larger homes, luxury properties, and plots are rising in popularity, while investor activity has slowed due to increasing prices. Buyers are focused on security and quality, preferring to invest in homes that meet their long-term needs. The market’s future will depend on mortgage rates and the ability to maintain trust in developers and regulatory measures.
Get More Updates Here
Housing Prices for New Property in Delhi-NCR Surge Over 145% in Five Years
Mortgage Market Overview: Residential Property
Stunning Prices for Luxury Apartment in Gurgaon Leave Social Media in Shock (75 Crore)