More consumers keen on home ownership over renting despite Covid-19 challenges: Survey

Real estate is emerging as a preferred investment asset class in the backdrop of economic uncertainty and rising stock market volatility with over 50% of consumers considering buying a new home in the next six months, showed a JLL India survey.

The survey was conducted online covering over 2,500 prospective homebuyers from Mumbai Metropolitan Region, Delhi-NCR, Bengaluru, Hyderabad, Chennai and Pune.

According to the survey, 91% respondents wanted to buy a home when asked to choose between buying and renting. Additionally, 67% believed that buying a home is a necessity, not a luxury.

The evolving COVID-19 pandemic will also influence short-term decision making with job security cited as the biggest concern when contemplating the purchase of a home, respondents say. The survey uncovered that a greater proportion of people in the age group of 20-35 years were likely to defer their home purchase plans by more than six months. Polled consumers above 35 years indicated that they are more inclined towards buying a property in the next six months

“Real estate has emerged as the most resilient asset class today and we see potential for more consumers to pivot towards home ownership in the longer-term. In tandem, ongoing work from home arrangements are pushing developers to become more flexible and give homebuyers the option of creating a study room if need be,” said Ramesh Nair, CEO & Country Head (India), JLL.

The importance of healthy living is gaining currency as societies with wellness amenities are being favored. Homebuyers are willing to pay a premium for properties from developers with track record, ready-to-move-in properties in gated societies and township projects.

“It is encouraging that more than 50% of the prospective homebuyers surveyed have expressed their readiness to potentially buy homes within the next six months. At the same time, developers are relatively flexible to allay buyers’ concerns in this fragile business environment with respect to immediate cash outgo and long-term financial obligation by offering attractive flexible payment options with minimum upfront payment,” said Samantak Das, Chief Economist and Head Research & REIS, JLL.

Affordable and mid segments are expected to continue driving the market as most respondents indicated a preference for properties in the sub Rs 50 lakh and Rs 50-75 lakh category. On the supply side, developers have also realigned their products, with 60% of the new launches in the past two years falling in the Rs 50 lakh and Rs 50-75 lakh price segments