50 per cent of respondents prefer buying new home in six months: JLL

The economic uncertainty and rising volatility in stock market are positioning real estate as the preferred asset class for investments with over 50 per cent of consumers planning to buy new home in the next six months, according to by real estate consultancy firm JLL.

About 91 per cent of respondents wanted to buy a home when asked to choose between buying and renting. Additionally, 67 per cent believed that buying a home is a necessity, not a luxury, JLL’s Homebuyer Preference Survey said.

The Covid-19 pandemic will also influence short-term decision making with job security cited as the biggest concern when contemplating the purchase of a property .

Polled consumers above 35 years indicated that they are more inclined towards buying a property in the next six months. Also, more than 50 per cent of the prospective homebuyers indicated a preference to buy a 2-BHK apartment with size ranging from 800-1,000 sq ft.

“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 pandemic has also accelerated the pace of digital transformation amongst developers and intermediaries. In the past, we’ve seen project discovery happen online, this moved to virtual tours and interactions, and now one-fifth of the respondents in this survey said they’re digital-ready to affect their transaction online end-to-end,” he added.

The markets of Hyderabad, Pune and Chennai provide indications of relatively healthy inventory management in terms of average construction period and years-to-sell (YTS). Further analysis reveals longer-term resilience might appear first in the southern markets of Bengaluru and Chennai.

The larger markets of Delhi NCR and Mumbai have high levels of unsold inventory in various stages of construction as well as greater YTS due to a prolonged slowdown in sales. The proportion of prospective homebuyers who deferred their home purchase decisions by more than six months is also higher in these larger markets, it added.

Most respondents indicated a preference for properties in the sub ₹50 lakh and ₹50-75 lakh category. On the supply side, developers have also realigned their products, with 60 per cent of the new launches in the past two years falling in the ₹50 lakh and ₹50-75 lakh price segments.

The alignment of demand and supply will support the recovery process and it is expected that the affordable and mid-price segments will continue to witness maximum traction in the post-Covid era as well.

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