3BHKs are the new 2BHKs as Indians yearn for a study room

• More than half (52%) of the participants who chose real estate as an investment asset were millennials.
  
• Recent layoffs by both large and small corporates are likely to have some impact on the demand in the next two quarters.
  
• For more than 80% of property seekers, the cost of property remains a crucial factor.
  

Sale of bigger, high-value homes has gained significant momentum in the popular real estate markets of National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) over the last few quarters.

Data from the CII-Anarock report 'The Housing Market Boom,’ reveals that over 45% of those seeking property in NCR are interested in purchasing 3BHK homes in the near future.

Similarly, in the pricey MMR region, 43% of respondents prefer 2BHK homes, while more than 32% are interested in 3BHK homes. Overall, 58% want to buy homes priced between ₹40 lakh to ₹1.5 crore, while 42% prefer 3BHKs, the report finds.

The Covid-19 pandemic has had a lasting impact on the preferences of homebuyers. The surveyed homebuyers are no longer just concerned about price and basic amenities when considering a property.

Instead, they prioritize timely project completion assurance, the availability of a study room, and adequate ventilation. Over 90% of homebuyers will not compromise on timely project completion, while 62% require well-ventilated homes and 55% consider a study room to be essential.

Millennials live it up

Half of the individuals surveyed — at least 52% —- who selected real estate as a viable investment option are millennials. The primary objective of these millennials is to purchase a home for their own personal use, rather than buying a property solely for investment purposes.

However, further interest rate hikes and recent layoffs may dent the housing demand going ahead.

“Rate hikes are just part of the overall demand scenario. Recent layoffs by both large and small corporates are likely to have at least some impact on the demand in the upcoming two quarters, and dent growth in the housing market. Many homebuyers impacted by layoffs may defer home buying decisions until their employment situation stabilizes. Nevertheless, buying homes remains the top priority for everyone,” said Anuj Puri, Chairman, Anarock Group.

The rate hike effect

The report focuses on the opinions of buyers during the current challenging times, including the possibility of another interest rate increase by the RBI in the near future.

According to the report, if such a rate hike occurs, the housing sales momentum in the top 7 cities may experience difficulties as nearly all prospective buyers (96%) claim that higher home loan rates will impact their decisions.

Furthermore, for more than 80% of property seekers, the cost of property remains a crucial factor, as the basic price of real estate has increased in the past year. Potential buyers are sensitive to changes in interest rates and property prices, and any significant fluctuations in these factors could have a significant impact on the real estate market in the near future.

Data from Anarock indicates that the average property prices in the top 7 cities of India have witnessed a growth of 6-9% in Q1 2023 (January to March) as compared to Q1 2022. This growth is primarily attributed to the surge in the prices of construction raw materials and an overall increase in demand. Among the top cities, MMR, and Bangalore registered the highest annual growth of 9%.

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