Real Estate Remains Top Investment Choice for Indians

Despite the availability of high-yielding investment options, real estate continues to be the most preferred choice for Indians, according to a FICCI-ANAROCK survey. The report reveals that 59% of respondents consider real estate as their top investment option. While the majority of buyers (67%) are purchasing properties for personal use, 33% are investing in real estate.

However, the demand for ready-to-move homes has declined, with a noticeable shift towards new projects. The current ratio of ready homes to new launches stands at 20:25, compared to 46:18 in H1 2020. The survey also highlights a growing preference for larger homes, with 51% of respondents favoring 3BHK units. While properties in the Rs 45-90 lakh range remain popular, there is a rising demand for premium offerings, with 28% of buyers opting for homes priced between Rs 90 lakh and Rs 1.5 crore. Apartments continue to dominate as the most preferred property type, accounting for 58% of choices. However, residential plots are gaining traction, particularly in southern cities.

Key buyer concerns include timely project completion, construction quality, and well-ventilated homes. The rising rental rates in major cities are driving investor interest, with 57% of buyers purchasing properties for rental income. Affordable housing, on the other hand, is struggling to meet expectations, with over 53% of homebuyers expressing dissatisfaction due to location, construction quality, and unit sizes. The survey also explores the impact of home loan interest rates on buying decisions. While 71% of respondents indicated that rates below 8.5% would have little impact, 87% stated that rates exceeding 9% would significantly influence their purchasing decisions.

Regulatory frameworks play a crucial role in fostering sustainable growth in the real estate sector. SEBI’s focus on transparency and governance has been instrumental in building investor confidence. The commercial real estate sector is also thriving, supported by the presence of numerous Global Capability Centers and emerging secondary markets. Technological advancements and the growing interest in alternative assets like REITs and distressed properties highlight the need for diversification and alignment with global trends. The FICCI-ANAROCK survey provides valuable insights into the evolving Indian property market. By understanding the preferences and concerns of homebuyers, industry stakeholders can tailor their offerings to meet the changing demands of the market.