Gone are the days when homes under construction used to be much in demand and were the preferred option for homebuyers for numerous reasons, including lower cost and wide availability. These days, however, ready-to-move-in (RTM) homes have caught the fancy of buyers as they are unwilling to take any risk, particularly in these uncertain times. The new age generation is clear about their needs as this pandemic has made them realize the importance of having a real estate asset. They are looking for ready-to-move homes where they can have control over their health. Even for investment purposes, they prefer RTM property as it becomes an immediate source of extra income. The demand for RTM properties has increased as the need is immediate because people want a solution.
There have been remarkable changes in the industry in the last six months, following the lockdown in March end. In a recent survey, it was found that 70% of the respondents want to buy a home for self-use. It is an ongoing trend as the current crisis has reinforced the idea of owning a home. Interestingly, buyers are also looking for long-term investment and parallel rental income.
An emerging trend that will offset the recent drag in demand, is the rise of liquidity amongst higher middle-income households in cities such as Bangalore, Pune, and NCR. Due to COVID, households now do not spend on international trips, eating out, shopping & amp; festivals, and regular weekend getaways. As a result, households on average have Rs 6-8 lakh of buffer liquidity, which they could spend on real estate, backed by a good payment plan.
In a post-COVID world, people would like to shift to the peripheries of the city wherein they can get larger homes at a lower price. 21.8% of participants in the survey wished to buy homes in the peripheries of the city. However, 39% would still prefer to purchase homes in central parts of the city. The survey has revealed that buyers are not just interested in affordable and mid-income housing projects but are also showing great interest in the luxury segment.
The RBI has also rationalized the home loan risk weighting and linked them to Loan to Value (LTV), which will further help in the disbursal of high-value loans. The demand has grown owing to the situation thrown at the door of the people after the global pandemic. People living in rented accommodation faced many difficulties. They realized the importance of having their own home. Additionally, NRIs are witnessing tough times abroad and are therefore coming forward to buy a property in India that can help them have security in case of emergencies. Post-COVID, people are more concerned about the real estate assets and are ready to pay extra if the property fulfills their requirements. In short, the pandemic has made millennials realize the importance of having their own home in these uncertain times.