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Millennials favour real estate as an asset class after COVID-19: Survey

Updated : February 18, 2021 03:29 PM IST

As per the survey, nearly 62 percent of respondents consider it expedient to buy homes right away.

About 57 percent of respondents now favour property over fixed deposits, the stock market, and gold.

The popularity of real estate as an investment asset class in India has increased perceptibly after the COVID-19 pandemic and most people think it is the right time to buy a house, thanks to various deals, discounts and cheaper home loans.

According to a survey conducted by ANAROCK Property Consultants and Confederation of Indian Industry (CII), the demand for branded developer continues to rise while most people favouring real estate as an asset class are millennials aged 25-35 years.

The online survey was conducted in January 2021 among nearly 3,900 participants to provide consumers, developers, investors, sellers and owners deeper insights into the Indian property market.

As per the survey, nearly 62 percent of respondents consider it expedient to buy homes right away. Around 24 percent of respondents have already booked properties and 38 percent opted for newly-launched projects.

Further, about 57 percent of respondents now favour property over fixed deposits, the stock market, and gold.

Meanwhile, 48 percent of respondents favouring real estate as an asset class are millennials aged 25-35 years; before COVID-19, they were just 17 percent. Most NRIs prefer luxury homes (Rs 90 lakh – Rs 2.5 crore); 3BHKs and 4BHKs top the demand list.

The work-from-home and online education culture has resulted in buyers seeking larger homes, even if it entails moving to peripheral areas, the report said. At least 43 percent respondents now prefer living in peripheral areas while just 28 percent favour homes in the city limits (in proximity to offices).

"There was a decrease in the preference for ready-to-move-in homes – a reduction of at least 17 percent since the lockdowns and 6 percent since the pre-COVID levels. One major factor for this could be that post-COVID, new supply was largely by branded developers," said Anuj Puri, chairman, ANAROCK Property Consultants.

According to him, homebuyers consider it safe to buy from strong organised players. Also, there is limited inventory available in the ready-to-move category

The ratio of demand for branded vs non-branded developer stands at 61:39 post-COVID, against 52:48 in the pre-pandemic period.

In terms of consumer preferences, demand for bigger homes across all BHK configurations has risen post-COVID. 2BHKs continue to be the hot favourite; however, buyers are now also on the market for larger sizes.

Around 69 percent of the survey's property-favouring respondents now prefer bigger 2BHKs (>600 square feet area) vis-à-vis just 38 percent in the pre-COVID period.

Speaking to CNBC-TV18, Puri said, "Demand started from affordable housing, mid-level housing and now it has gone into the luxury and the premium spaces and we are seeing lot of take-up of demand happening there. We have seen the demand has been more than the new launches. As a result of which during this pandemic the unsold inventory has come down."

Meanwhile, on the commercial real estate segment, Ashok Tyagi, whole time director of DLF expects that the demand from office spaces will recover gradually as the vacancies picking up.

"We believe that fundamentally the office demand will come back. It may not come back with the sort of gusto that it used to have three years back, clearly, we believe that it will come back substantially. We are seeing the office attendance level gradually inch up," Tyagi said.

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