NEW DELHI: Over 55 per cent respondents in a consumer survey, conducted by industry body CII and property consultant Anarock, expect housing prices to rise this year on higher input costs.
The survey, conducted between July 2021 and December 2021, polled 5,210 participants via various digital platforms across tier 1, tier 2, and tier 3 cities.
“56 per cent of respondents expect housing prices to rise in 2022 due to inflationary trends in construction raw materials and overall operational costs for developers,” Anarock said in a statement.
An under-10 per cent increase in housing prices would have a moderate-to-low impact, but an increase of over 10 per cent would have more profound repercussions on buyer sentiment, the survey suggested.
“Votes, favouring real estate as an asset class, rose by 3 per cent in this survey – from 54 per cent in the H1 2021 edition to 57 per cent in H2 2021. This is especially significant since housing prices are likely to rise by 5-8 per cent in 2022 due to increased input cost pressure and supply chain issues,” Anarock Chairman Anuj Puri said.
Hardening interest rates, which are very likely in the second half of 2022, will be another factor driving up the overall acquisition cost for the homebuyers, he added.
Nevertheless, the new pandemic-induced desire for home ownership continues to be robust, Puri said.
“At least 63 per cent of previously fence-sitting respondents are now determined to become homeowners. For another 30 per cent, the pandemic has not impacted their buying decisions, effectively resulting in 93% of respondents now convinced homebuyers,” he added.
Among the other findings of the survey, approximately 63 per cent prefer homes in the mid and premium segments priced within Rs 45 lakh – Rs 1.5 crore.
The demand for affordable housing has dropped further from 40 per cent in the survey’s H2 2020 edition to 27 per cent in H1 2021 and 25 per cent in H2 2021.
Though ready-to-move-in (RTM) homes are still the most preferred category for 32 per cent of respondents, this denotes a 14 per cent reduction for this preference since the first COVID-19 wave.
The survey also studies the property types in highest demand across cities, from preferred property sizes, hottest-selling budget ranges and residential plots.
“Residential plots are the second-most preferred property type in the top 7 cities – and the most preferred option in tier 2 and tier 3 cities and towns. Apartments are still the property type of choice for urban buyers,” Anarock said.
Only 17 per cent of surveyed urban buyers will pick a plotted development over other property types, but a significant 51 per cent of respondents from tier 2 and tier 3 cities favour plotted developments.
Source: Press Trust of India