Residential market back on recovery path

Hyderabad: With most of the prospective homebuyers expected to make a purchase in the next three months, the residential market is expected to get back on the recovery path and 2021 is likely to end on an optimistic note. If the impending Covid-19 wave can be contained and consumer sentiments improve further with the festive season, the sector is expected to make a healthy recovery in the second half of 2021.

Moreover, a trend reversal is seen with developers launching larger sized houses and apartments to capture the changing preferences of consumers in the post-Covid era. Most of the changes witnessed in the sector have been structural in nature and demand for homes is only expected to increase. New launches are expected to go up in H2 2021 as developers want to monetise their land banks.

Nearly 80 per cent of the prospective homebuyers preferred properties priced below Rs 75 lakh, according to 'Homebuyer Preference Survey 2021: The Covid-19 Impact' by JLL in association with Roof-and-Floor. Most of the buyers making a home purchase decision for self-use with an increase in the proportion of buyers upgrading to larger houses and those looking for a second asset.

The market survey covered more than 2,500 prospective homebuyers with respondents spread across the top six cities of Mumbai MMR, Delhi NCR, Bengaluru, Hyderabad, Chennai, and Pune.

In certain markets like Hyderabad, which have seen a reasonable appreciation in home prices over the last few years, increasing interest from investors was witnessed as they found this to be an opportune time to strike a good deal with developers. The buyers are showing a greater willingness to relocate to suburban/peripheral markets to get larger homes while keeping the budget intact.

Cities like Bengaluru, Chennai, Hyderabad as well as the Delhi NCR market are the prominent cities where the demand for 3BHK apartments has increased. Layouts of apartments, presence of balconies and an additional small room for work/online classes are in focus. This trend is more prominent in the cities of Mumbai and Pune where 1BHK and 2BHK are usually the most sought-after configurations.

Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL, said: "Structural reforms within real estate in the last few years started the process of weeding out smaller, unorganised developers from the market. The pandemic was the final nail in the coffin as it tilted the scale further in favour of established developers. Most of the new launches have been driven by reputed developers."