Real Estate Consumer Outlook- 2017teja7.kuikr.com/o1/20170705/ak_760101543-1499247389.pdf2017/07/05 · Apartment Independent Floor Office Space / Retail Plot/ Residential Land Villa

The beginning of the year 2017 ushered a whole lot of changes in the Real Estate Sector. Various initiatives announced in the Union Budget 2017-18 talked about magnifying infrastructure, improving connectivity and providing affordable housing. Home loan interest subsidies, infrastructure status to affordable housing and change in the holding period of LTCG tax are expected to spur the market.

We noticed no price appreciation of the property, attractive offers to lure the customers, all due to the historic decision taken by the Indian Government in the 4th quarter of 2016 –Demonetization.It was these aftereffects of Demonetization that the first quarter of 2017 saw a sluggish supply in new project launch, seemingly very low price appreciation in the existing market.

However, the Q1-2017 closed with the positive note supported by historic plunge in the bank loans which changed to as low as 8.4% alongwith the introduction of other attractive schemes such as Credit Linked Subsidy Scheme to support Pradhan Mantri Awas Yojana.

In this backdrop, QuikrHomes conducted a comprehensive survey which captured consumer sentiments extensively. The survey received an overwhelming response by as many as 1522 participants. It highlights the key trends that will shape the realty sector in the coming months. To understand the behavior of investors, the survey included:• Socioeconomic and demographic profile of participants• Preferred investment options• Consumer inclination for property investment 2017• Purpose of buying property- Investment Vs End-Use• Investor preferred budget for property buying• Preferred property type• Key reasons, which hold’s consumers back while buying a

property• Best stage of buying a property• Expectation of annual returns on Real Estate• Demonetization Effects Will there be a drop in price due to demonetization? Expected price decrease due to demonetization Impact on transactions as per Property Market- New

Property, Resale & Land transaction• RERA Popularity • RERA Implications

Real Estate

Consumer Outlook-2017

REAL ESTATE: CONSUMER OUTLOOK | 2017 1

%Workplace of

the Participants

27%

Bengaluru

17%

MMR

16%

NCR

10%

Hyderabad

4%

Kolkata

10%

Chennai

8%

Pune

Married

72%

Unmarried

28%

Marital Status

Male

86%

Female

14%

Gender typology

17%

10%

8%

7%

58% Under 10 Lac

Over 35 Lac

Between 25 – 35 Lac



Family IncomeAn

nu

al

Fam

ily I

nco

me

9%,

58%,

24%,

7%, 2%,

18 to 24 25 to 34 35 to 44

45 to 54 55 to 64 65 to 74

Age group of

participants

Survey Participants Geographic & Demographic Distribution

Top 14 Cities From India

INDIA, 96%

NRI, 4%


0%

50%

100%

Abroad (NRI) Bangalore Chennai Hyderabad Kolkata MumbaiMetropolitan

Region (MMR)

NationalCapital Region

(NCR)

Pune Tier 3

5% 10% 5% 8% 5% 11% 7% 10%7%15%

12% 2%7%

12%4%

8%9% 13%

9%14% 8%

79%62%

63% 70%73% 66%

72%65% 75%

14% 11% 4% 2% 10% 14% 2% 14% 7%

Fig. 1 : Best Asset Class For Investment

Fixed Desposit Gold Government Bonds Mutual Funds Real Estate Stocks

With so much action in the market, it was important to know which asset class is dominating the investors’ mind and Real Estate again grabbed the top spot with 70 % votes in QuikrHomes Consumer Survey 2017.From NRI investors, we received overwhelmingly response for Indian Real Estate Sector and they also marked Real-Estate option as a best asset class for investment in 2017.While real estate was still the first choice of respondents, the interesting aspect was to see the variation in secondary & third preferences. Overall, Mutual Funds & Stocks got neck to neck votes, with mutual fund being the second preferred choice for Pune, MMR and Bangalore respondents followed by Stock deposit as a third choice in these cities.However, NCR and Tier 3 cities respondents still continues with fixed deposit as their second choice after real-estate because they consider it to be the safe investment option and its also offers some liquidity. In Chennai & Hyderabad, gold continue to tempt as an second preferred investment options despite efforts by government and the RBI to curb demand for the yellow metal. While, low interest rates in the Government Bonds markets made investors stay away from this option.

0%

20%

40%

60%

80%

100%

120%


Region (MMR)


(NCR)

Pune Tier 3

0%

41%19% 28%

45%28% 35%

22% 11%0%

17%

15%10%

0%19% 15%

9%11%

100%

42%67% 62% 55% 53% 50%

70% 78%

Fig. 2 : Planning to Buy a property in 2017? MAYBE NO YES

In 2017, would you prefer to invest in Real Estate?

In Pune, about 70% respondents are planning to invest in remaining months of 2017, while 22% were not sure. Chennai, Hyderabad & MMR also painted a somewhat similar story.In NCR, about 50% of respondents displayed confidence, while 35% might invest. In Bangalore, nearly 42% respondents displayedoptimism while good 41% respondents displayed subdued feeling of uncertainty. A few 17% are not willing to invest at all.


Unlike 2016, mutual funds & stocks is now the second preferred asset class for maximum respondents across cities. Earlier, majority of the respondents across cities preferred to invest in fixed deposit instead of mutual funds & stocks.

In comparison, the survey conducted in 2016 showed only 49% people would invest in 2016. Clearly, the 2017 survey indicates a positive outlook for the real estate sector in 2017.

The interesting question is what will be the trends from the demand prospective in 2017. It is a big relief for the industry as the majority (57%) of respondents are planning to buy a property in 2017.Having said that, there are still 30 per cent of respondents who are confused and thus are hesitant to make their minds aboutbuying or invest in a property in 2017. A small number of respondents, 14 per cent are not willing to invest at all in year 2017 as per QuikrHomes Survey 2017.

Best Asset Class For Investment in 2017

While doing a comparative study of investment vs End use, End-Use was the major motive behind buying properties among Indian residents with 64% of votes casted in favor of End-Use & over 36% votes for investment purpose. On the contrary, we found out that about 93% of NRI respondents were willing to buy property for investment purpose over a meager 7 % who were interested for End-Use.

0%10%20%30%40%50%60%70%80%90%

100%


Region (MMR)


(NCR)

Pune Tier 3

7%

62%52% 55%

64% 60%76%

52%67%

93%

38%48% 45%

36% 40%24%

48%33%

Purpose of Buying Property End Use Investment

0%

20%

40%

60%

80%

100%


Region (MMR)

National CapitalRegion (NCR)

Pune Tier 3

10%

55%72% 75% 73%

46%

75% 72%89%

43%

26%18% 19% 18%

30%

19% 20%11%

27%

15%8% 3% 9%

17%5% 7% 0%20% 4% 2% 2% 0% 7% 1% 1% 0%

Preferred Budget Within 40 Lacs Between 41 Lac to 70 Lac Between 71 Lac to 1.2 Cr Over 1.2 Cr

Announcement in favor of Affordable Homes by Indian Government sent a frenzy amongst the public and consumer sentiment is clearly dominated by the preferred budget range “Within 40 Lacs”. Preferred Budget, overall 64% of respondents chosen the affordable budget range.While affordable is the first choice, it is interesting to note the variations in secondary preferences. At present, “41 lakh to 70 lakh” seem to be the flavor of the season with it being the second choice among the 24 per cent respondents in overall survey.Interestingly , only 10 per cent respondents voted for more than Rs. 71 lac budget range.

End Use 59%

Investment 41%


As per QuikrHomes survey, overall 59 % participants would be like to buy property for End-Use and 41 % voted for investment purpose .

On the other side, nearly 40% of NRI respondents preferred their investment budget range from Rs. “41 Lac to 70 Lac” followed by 27% NRI respondents who are interested in keeping Rs. “ 71 Lac to 1.2 cr” as their preferred budget range. A good (20%) of NRI respondent voted for the luxury segment, who wanted to invest in projects with a hefty price tag of “Over 1.2 Cr”.It’s also important to know the luxury segment Indian investor base city, overall only 4% respondents showed their interest to invest “Over 1.2 Cr”. Majorly MMR, Bangalore & Chennai comes as top three cities who’s respondents wants to invest projects with a price tag of “Over 1.2 Cr”.

According to QuikrHomes survey, about 64 per cent participants have a budget less than Rs 40 lakh.

Preferred Budget for Property Investment in 2017

Preferred Purpose of Buying Property in 2017

0%

20%

40%

60%

80%

100%


Region (MMR)


(NCR)

Pune Tier 3

67%43%

22% 14%

45%74%

50% 43%22%

0%

3%

4% 10%

0%

0%

4%0%

11%

13%

0%

4% 0%

0%

4%

2%4%

0%

0%

31%44% 45%

55%11%

30%30%

44%

20% 23% 26% 31%

0% 11% 13% 22% 22%

Preferred Property Type

Apartment Independent Floor Office Space / Retail Plot/ Residential Land Villa / Row Houses

Most Preferred Property - Type for Investment in 2017

Preferred property type depends upon the city density and availability of lands near city center or work place.But, due to the sky rocketing price of land & non availability of barren land near city centers to build a individual house, individual’s preference is shifting towards investing in an apartment to meet their needs. Going by the past year’s trend, respondents from MMR, NCR & Pune are still highly inclined towards buying an apartment. Unlike H12016, “Apartments” are now the most preferred property type for maximum respondents in Bangalore, even though earlier, majority of Bangalore buyers preferred to buy “Plot/Residential Land” followed by “Villa/ Row Houses”.Respondents from Hyderabad, Chennai, Kolkata & Rest of India still have “Plot/Residential Land” as their preferred choice, followed by “Villa/ Row Houses”.However, NRI respondents clearly want to invest in Apartment followed by “Villa/ Row Houses”.

0%

20%

40%

60%

80%

100%

120%


Region (MMR)


(NCR)

Pune Tier 3

7%19%

7%31%

0% 9%22% 26%

0%

28%19%

15%

10%45%

9%4% 4%

22%

40%18%

22%

21% 9%

11% 4%17%

0%

26%45%

56%38% 45%

72% 70%52%

78%

Key Reasons Holding Consumers Back

Job Uncertainty Lack of Relevant Guidence Lack of Transparency Waiting for Prices to Come Down

Key Reasons Holding Consumers Back while Buying Property

We all know that making a decision to buy/invest in a property is not an easy task and there are various major factors which holds consumers back, while buying a property.According to survey, more than half of the consumers throughout the cities are still “Waiting for property prices to come down”, whereas, “Job Uncertainty” & “Lack of transparency” were the second & third most important reasons to holding the consumers back in megacities like Pune, Hyderabad, NCR and Bangalore.On the other hand, NRI investors were highlighting the “Lack of transparency “ as the biggest factor with “Lack of relevant guidance” being the next important factor with 28 percent of votes followed by 26 percent expecting the “Price Correction”.


A per survey, 45 percent respondents voted for Apartment as a their preferred property type to buy. Besides other reasons, the result also indicates that most people don’t want to go through the hassle of building a house.

Apartment communities offer security and additional lifestyle facilities such as club house, swimming pool, open spaces, gym, community halls etc.

A per survey, nearly 54 per cent votes cascaded towards “price drop” option. Interestingly, developer’s community have already picked the consumer’s nerves and have started attractive them with lucrative offers and deals.

0%

20%

40%

60%

80%

100%


Region (MMR)


(NCR)

Pune Tier 3

47%

24% 22% 24% 18% 11% 17% 22% 22%

13%47% 52%

28% 45%45%

50% 48% 56%

33% 5%15%

31% 9% 19%11% 13% 0%

0%

9%0% 7%

18% 6% 4%4% 11%

7%14% 11% 10% 9% 19% 17% 13% 11%

Preferred Stage of Buying?

Pre-Launch Property Ready to Move In Property Under Construction Property in Early Stage

Under Construction Property in Mid Stage Under Construction Property near to Completion

Preferred Stage of Buying Property?

Investment in property is an strategic step which hugely depends on the “Stage of Construction” in which you are buying a property which directly effects your budget. But, due to monumental construction delay cases and large number of early-launched properties going into litigation has made “Ready to Move In Property” a far more safer bet, among all Indian citizens for End-Use purpose. However, maximum chunk of NRI investors still prefers to invest in “Pre-Launch Property” & “Under-Construction Property in Early Stage” to reap the maximum monetary benefits.Moreover, a sizable section of prospective buyers from all over India who have investment on their minds, still prefers “Pre-Launch Property” & “Under-Construction Property in Early Stage” to maximize their ROI.

0%

20%

40%

60%

80%

100%


Region(MMR)

NationalCapital

Region (NCR)

Pune Tier 3

47% 40%26% 28% 31%

44% 44%

26% 22%

29%33%

42% 36% 34%

36%28%

35%

11%

14% 15% 21%17% 22%

11%18%

13%

33%

10% 12% 11%19% 13% 9% 10%

26%34%

Expected ROI

Upto 10% Between 11% to 20% Between 21% to 30% Over 30%

As the real estate industry heading towards transparency and being more organized, today’s well-informed buyers’ expectation from realty investment has become more realistic. Similar to international investors in western countries, they no longer aspire for high returns from their property.

Survey results, clearly indicates the majority of consumer sentiments are with “Ready to Move In Property” with 54 per cent votes.


It is interesting to see that respondents in all Tier 3 cities, Pune & Hyderabad markets continue to remain too optimistic aboutthe high return on investment. This may also be due to the fact that the prevailing prices in these cities are relatively lesser than their other metro counterparts.

Overall, 32 per cent (majority) of the participants expect up to 10 per cent annual return from their real estate investment. Considering the current market situation, annual returns in therange of 9-14% are relatively healthy.

Expected Return On Investment From Real Estate?

According to QuikrHomes Survey, majority of respondents are anticipating a drop in price due to demonetization, while 14 % not sure about the price drop.A good 29% not at all expecting the price decrease due to demonetization. NRI respondents have very strong feeling of price decrease with 92% votes cascaded in favor of the price decrease due to demonetization. However, 59% respondents from top cities & 57% of tier 3 cities have the same feelings. Surprisingly, good 29% Tier 3 cities respondents not at all have feeling of price dip . While, only 13% of Top cities respondents voted in favor of no price change due to demonetization. A good 28% voters from Top cities are not sure about the price drop followed by 14% Tier 3 cities respondents.

0%10%20%30%40%50%60%70%80%90%

100%


Region(MMR)


(NCR)

Pune Tier 3 Grand Total

7%26%

45% 42% 46%

21% 24% 18%

56%32%

59% 26%

15% 17% 18%

26%36%

30%

11%

26%

27%

22% 7% 10% 9%21%

24% 39%11%

19%

7%26% 33% 31% 27% 32%

16% 13% 22% 23%

Expected price decrease?

Up to 10% Between 11% to 20% Over 20% No Changes in Prices

Our analysis recoDemonetization makes a major impact here with majority of consumers expecting the price correction alongwith the much needed transparency in the real estate market. About 32 per cent of the respondents expected the decrease of “Up to 10 per cent” prices followed by 26 per cent expecting “Between 11% to 20% price decrease“, whereas 21 per cent respondents expected “Over 20% price decrease”. Surprisingly, a good 23% voters not at all expecting the price decrease as per demonetization.mmends that respondents looking for property in Luxury Segment can see a higher price correction in a short term.

In November 2016, the Indian government took a major step by Demonetizing the Rs. 500 & 1000 notes in order to remove black money from the market. Real-Estate sector also got affected by this decision. Property market in this duration was very dynamic with almost all the developers advertising their projects with lucrative offers to attract the consumers. In an effort of providing a better deal, during the first quarter of the year 2017, developers joined their hands with various financial institutions to offer affordable loans as well, and announced other schemes for helping buyers to take better decisions.It was a once in a lifetime opportunity for the buyers and the they reaped full benefit of the schemes offered by the builders and developers. Having said that, providing these attractive offers will just be a substitute of price decrease and another step to attract the maximum consumers towards the industry.

Effect of Demonetization on Property Prices - Will there be a drop in price due to demonetization?

According to QuikrHomes survey, overall 57% voters still have a hope of further decrease in prices due to demonetization.


0%

20%

40%

60%

80%

100%

Abroad (NRI) Top CitiesIndia

Tier 3

8%28%

14%

13%29%

92%

59% 57%

Will there be a drop in price due to demonetization?

MAYBE NO YES

Expected price decrease in Real Estate due to Demonetization?

Majority of respondents are expecting “Up to 10 Per cent” price correction due to demonetization.

Welcome To RERA

A majority, 74% of respondents showed positive response towards the implementation of RERA which is expected to make real estate sector transparent & organized.But, a sizable chunk of 21% respondents think that this act “Might Help” and a small 5% showed low hopes towards it’s impact on making the Real Estate Sector sector organized.

In the year 2017-2018, RERA will be the biggest game changer for the real-estate industry, a revolutionary step that challenged to change the whole system. RERA promises to help the Indian Real Estate sector appear much more stronger, transparent and capable of prolonged and sustained growth. RERA effect also created a hype amongst the property seeker to know it’s effect onreal-estate sector. To palpate the consumer’s nerves, we posed a few questions in front of them & the answers were a mix-bag of opinions.

0%10%20%30%40%50%60%70%80%90%

100%


Region(MMR)

NationalCapital

Region (NCR)

Pune Tier 3

Do You Know about Real Estate Regulatory Act (RERA)

NO YES

0%

20%

40%

60%

80%

100%

120%


Region(MMR)

NationalCapital

Region (NCR)

Pune

0%19% 30%

13%40%

17% 20%40%

0%

5%20%

13%

0%

6% 0%

0%100%

76%50%

75% 60%78% 80%

60%

Will RERA Make Real-Estate Sector More Transparent and Organize?

Maybe No Yes

The government presented the RERA(Real Estate Regulatory Authority) Bill in the Parliament with the intention that real estate transactions can be regulated with proper rules and regulations. The bill hopes to bring in the much-needed transparency in property dealings through provisions for registration of real estate projects and agents with the Real Estate Regulatory Authority; functions and duties of promoters and agents; rights and duties of allottees etc. It will lead to establishment of Real Estate Regulatory Authority and Real Estate Appellate Tribunal in every State for registration of all real estate projects and for speedier dispute resolution respectively. Stringent penalties have been sought to be imposed on habitual offenders. This, it is believed, will act as a deterrent for those few erring builders who bring bad name to the developer community at large. However, some experts expressed certain apprehensions about it saying that it will add another layer of bureaucracy in already heavy-burdened realty sector. Some stressed on the single-window regulatory mechanism for developers and builders while few state that it should ensure that real estate transactions are carried out in a just and equitable manner.

Will RERA Make Real-Estate Sector More Transparent and Organize?


Interestingly, NRI respondents showed maximum faith towards RERA and it’s subsequent effects on Real Estate Sector.

RERA’s popularity amongst the respondents was low wherein a whopping 51% of the respondents were unaware of RERA with only 49% of the respondents being well aware about it.

Surprisingly, 100% respondents from tier three cities were unaware about RERA.`

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Copyright © 2007-16 QuikrHomes | CommonFloor. All rights reserved.The information provided herein is based on QuikrHomes & CommonFloor data which is collected from various publicly known sources viz, websites, documents and mapsincluding QuikrHomes & CommonFloor's proprietary data model. Projects mentioned in the report are selected solely on basis of various parameters including number ofunits, price range and unique selling point, among others. The selection, omission, or content of items does not imply any endorsement or other position takenby QuikrHomes & CommonFloor.The information is provided on an "as is" and "as available" basis. QuikrHomes & CommonFloor expressly disclaim warranties of any kind, whether express or implied,including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose and non-infringement.

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Documents

Real Estate Consumer Outlook- 2017teja7.kuikr.com/o1/20170705/ak_760101543-1499247389.pdf2017/07/05 · Apartment Independent Floor Office Space / Retail Plot/ Residential Land Villa