The economic growth is fuelling the purchasing power of home buyers and the potential to afford flexible EMIs seems to be picking-up. This has fuelled home sales in India, which are at present highest in the last seven years, and NCR-Delhi seems to be leading this trend. Incidentally, NCR-Delhi has also replaced Bangalore as the start-up capital of India and growing startups and unicorn’s community is also exploring the residential sector for investments.
The 66% young population – below the age of 35 years, are also emerging as young millennials borrowers of home-loans. Home-loans market is driven by young borrowers within the age group of 26-35 years – about 25%, and also by people in the age group of 36-45 years – about 28%. These are all active home-loan borrowers and jointly account for 53% of annual originations.
The average ticket size of home-loan of young borrowers has also continued to increase over the last 5 years – with a CAGR of 6.2%, and the ticket size continues to increase more for women than men. The cumulative active home-loan base of these borrowers has continuously grown over the last 3 years at a CAGR of 3.5%.
The residential segment is constantly seeing increase in demand with 8 major cities leading this trend. Both Anarock and PropTiger have reported significant increase in sales of homes and the trend is expected to continue in 2022. As per Knight Frank India report, the prices of homes are seeing an upward trend due to increase in demand. The demand is more for ready to move-in flats and especially that have that extra 0.5 accommodation.
Seeing the trend, the developers have lined up new launches and they are already up by 43% in residential sector, Anarock has reported.
The recent trend in NCR – Gurugram is a classic example of flexible budgets of investors in residential segment as more than 30% homes that sold were priced above Rs.80 lakhs, though the larger segment is preferring 2 BHK in the price range of Rs. 55-60 lakhs. Anarock in his report has also stated that at least 28% home buyers are preferring extra half-bedroom or 0.5 extra, as the report mentions.
Pankaj Bansal, says, “Home buyers are becoming flexible in their budgets for buying their choice of homes and also considering the payment options, timely possession and overall attractiveness of the project. It is true, home buyers are preferring homes that have 0.5 extra space or half-bedroom or study-room space as you may call it. This space is also quite sufficient to be used as a single-bed room with limited fixtures. There is definitely a shift in the mindset of home buyers and budget is not as much constraint or defending factor for today’s buyers as it used to be 5-years back. The large chunk of young millennials who are looking for stability in investments in assets and also quite aggressive now.”
Pankaj Bansal is Director in M3M India, a leading real-estate developer in Gurugram, that has delivered about 40 projects consisting over 2 crore square feet of space and about 4 million square feet of retail space. M3M India has also been leading retail market in the northern India.
“Assessing the growing demand in residential sector, M3M India has recently launched M3M Capital, a complete luxury golf-theme-based residential project, with a top-line of Rs. 4000 crore. It is located on Dwarka Expressway in sector-113, Gurugram. At present we have launched about 650 apartments of 2.5 and 3.5 bedrooms accommodation, and the project has exclusive golf-courses, private foyer, green landscape, separate yoga & meditation area, and a 60,000 square feet clubhouse. The project has close proximity to Aerocity and Delhi International Airport, and is part of larger vision for Smart City Delhi Airport. M3M Capital is emerging as a preferred choice for the home buyers due to its proximity and facilities and we clocked aggressive booking of Rs. 800 crore in the first three days of its launch”, says Pankaj Bansal.
Currently, one-third of India’s population reside in cities and it is estimated to go up to 50% by 2030. There is a steady rise in the number of households with a shift towards nuclear families and increased urbanisation.
(Economy India)
