67% still want to invest in properties despite COVID

Photo: For representational purpose

73 per cent likely to reduce budget.

Gen Z are the first ones who took a flight away from the property market.

Uncertainty in prices emerges as the top obstacle in property buying.

India’s real estate has been impacted deeply by the COVID-19 outbreak and consumer sentiment is currently pessimistic and uncertain due to the national lockdown effects.

Also read: COVID 19: Impact on Real Estate Sector 

Also read: Real challenges post COVID-19

Also read: Combating real estate challenges post-COVID-19 

A recent consumer sentiment report by Magicbricks – COVID-19 Property Buyer Sentiment Survey – reveals that one out of three homebuyers want to drop or keep on hold their property purchase decision. However, a large majority of 67 per cent are still planning to go ahead with their investment, although with a reduced budget.

The consumer sentiment survey reflects that 67 per cent of the respondents still want to invest in a property albeit with some delay, highlighting the reinforced significance of home ownership during any catastrophe like a pandemic or a national lockdown. It also revealed that 73 per cent of home buyers are likely to decrease their budget.

Reflecting the overall consumer sentiment, Magicbricks’ COVID-19 Property Buyer Sentiment Survey also stated that during the pre-COVID-19 period, about 56 per cent of the respondents had either shortlisted or were actively looking to buy property in less than six months. However, the outbreak has led to most buyers stretching their timelines by a few more months. Interestingly, it has been observed that the Gen Z (people born in the 90s) are the first ones who moved out of the property market, with 50 per cent either holding or dropping their plans to invest in a property. On the other hand, people in the age group of 25-45 years seemed inclined towards buying properties with a reduced budget. Also, on an average, 52 per cent of buyers are looking to postpone their buying plans, these buyers being those who had either shortlisted a property or were actively looking or exploring.

Commenting on the report, Sudhir Pai, CEO, Magicbricks, said: “The real estate industry was already suffering from liquidity crisis and construction delays, and now the COVID-19 outbreak and the resultant national lockdown has just compounded the problems for the industry. This has temporarily affected the buying intent of more than 80 per cent of homebuyers across Tier-1 cities. This in turn has also delayed the home buying process by six to nine months.”

Across cities, Pune and Bengaluru witnessed the least decline in buying sentiment due to the uncertainties around the outbreak of COVID-19 among Tier-1 cities. Even in the post COVID-19 scenario as well, the buying intent in these cities is somewhat less affected as per the Magicbricks research. National Capital Region (NCR) and Mumbai Metropolitan Region (MMR), already had sluggish market sentiments before the lockdown and comparatively lower consumer buying intent. The survey indicated that both these markets are likely to be slightly less affected by the lockdown when compared to cities such as Ahmedabad and Kolkata.

Investors and end-users

The Sentiment Analysis found that while both investors and end users remain affected to an extent because of the pandemic, the investor community is more likely to defer their property investment plans. The survey findings further go on to hint that in general, the end-users are more inclined to buy property in the near term post-COVID-19. Thus, despite the overall expectations of price fall in at least few pockets across the country, it seems the end-users should be the first to return to the market. 69 per cent end-users are planning defer their property purchase decisions up to a year.

Challenges post Covid-19

During these times of uncertainty and apprehension, buyers are facing multiple challenges while evaluating their options. According to the Magicbricks’ Survey, the top five challenges to property buying post-COVID-19 are price uncertainty, timely handover of the project, visiting sites, getting loans from banks and registry and documentation of the property.

What developers can do for homebuyers?

When respondents were asked about the key areas which developers could facilitate for buyers in purchase of the property post lockdown, the key factors enumerated were:

Decrease in prices remained the top ask of the respondents from the developers.

3/4thof the respondents felt that relaxed financial terms like a moratorium period and lower down-payments were the most critical areas to help buyers make a purchase

Respondents also felt that in a post-lockdown environment, they may face difficulty in getting ‘upgrade-works’ in the property like creating a modular kitchen and woodwork

About 43 per cent of the buyers felt that developers should provide furnished properties to lessen the post-buy hassles

Less human interaction and online paperwork were cited as also cited as important by one fourth of the respondents.

The Magicbricks’ Property Buyer Sentiment Survey (during COVID-19 crisis) is designed to understand buyer’s updated outlook of the real estate market during the crisis, the current deciding factors for purchasing property and the new property preferences and consumption patterns. These factors are expected to lead to the emergence of significant trends in the Indian real estate industry.