Real Estate Tops Investment Choices Amid Evolving Market Trends

A FICCI-ANAROCK survey reveals a strong preference for real estate investment in India, with 59% favoring property despite high market returns. Key trends include a shift towards new projects and premium homes, alongside increased demand for larger units, while regulatory frameworks support sustainable growth in the sector.

Amid soaring markets and impressive mutual fund returns, the FICCI-ANAROCK survey underscores that 59% of respondents still prefer real estate as their top investment choice. The 'Homebuyer Sentiment Survey - H1 2024' highlights significant shifts in India's real estate market, driven by changing buyer preferences and evolving trends.

The survey reveals 67% of buyers are purchasing properties for personal use, while 33% invest for returns. There's a marked shift from ready-to-move-in homes to new launches, with the ratio of ready homes to new projects at 20:25, compared to 46:18 in H1 2020. Additionally, a substantial 51% of respondents show a preference for larger 3BHK units.

While properties in the Rs45 to 90 lakh range maintain their popularity, there's a discernible move towards premium homes priced between Rs90 lakh and Rs1.5 crore, preferred by 28% of buyers. Overall, apartments remain the dominant property type, chosen by 58% of respondents, though residential plots are becoming more popular in southern cities.

Key concerns among buyers include project completion timelines (98% of respondents), construction quality (93%), and ventilation (72%). In response to rising rental rates in major cities, 57% of buyers seek properties for rental income.

Affordable housing is failing to meet expectations for over 53% of buyers due to issues with location, construction, and size. The survey indicates home loan interest rates below 8.5% have minimal impact on buying decisions for 71% of respondents, but rates above 9% would influence 87% of potential buyers.

In a keynote speech, SEBI Executive Director Pramod Rao highlighted the critical role of regulatory frameworks in ensuring sustainable growth. 'Investor confidence is essential for the long-term success of the industry, and SEBI's focus on transparency and governance is pivotal in building this trust,' Rao remarked.

Raj Menda, Chairman of the FICCI Committee on Urban Development and Real Estate, noted the thriving commercial real estate sector, fueled by 1,600 Global Capability Centers and emerging secondary markets. He emphasized the industry's need for diversification and alignment with global trends as it evolves.

Anuj Puri, Chairman and Founder of ANAROCK Property Consultants, affirmed the survey's value in providing important insights into the Indian property market from a consumer perspective. Sanjay Dutt, Managing Director and CEO of Tata Realty and Infrastructure, pointed to the sector's evolution, particularly the transition to smaller-scale REITs (SM REITs).

He highlighted the benefits of fractional ownership, which allows investors access to high-quality assets with lower capital requirements, thereby democratizing real estate investment.

(With inputs from agencies.)