PropIndex (Apr-Jun 215), an India Apartment Index by Magicbricks takes a closer look at buyers’ expectation in the present real estate market.
Close analysis reveals that at national level, almost half (49 per cent) of the consumers are looking for housing options in sub-Rs 60 lakh segment. Within this budget range, the share of consumer preference in sub-Rs 50 Lakh segment is 75 per cent.
Preference for lower budget segments is reinforced by the fact that 47 per cent consumers are looking for 2BHK options. The availability of housing options is exactly opposite. Developers across India are concentrated in supplying larger format houses which has ultimately led to demand-supply gap.
With 60 per cent of 2BHK supply in 900 – 1,200 sq ft saleable area range, the relatively smaller size (sq ft) of 2BHK format helps the consumers to keep the acquisition cost low at different price points (INR/sq ft).
E Jayashree Kurup, head – Content & Research, Magicbricks says, “The report highlights that while consumer interest is in lower budget categories, the supply side is catering to higher budget segment. The propensity to introduce more units in 3BHK format exacerbates the situation as its larger size increases the total acquisition cost and takes it beyond the consumers’ budget range.
There is a case for supply side to better align itself with consumer preference. And while aspects like price will take time to sort out, developers can address consumer preference for lower budget by designing smaller yet smart dwelling units”
Few key highlights of the report are:
- The National Property Index witnessed a marginal increase of 1 per cent in index value in April-June 2015 quarter. Whereas Bengaluru witnessed the maximum gain (6 per cent) in City Index, Delhi was at the other end of the spectrum with 3 per cent decline.
- Overall, southern region comprising of Bengaluru (6 per cent), Hyderabad (4 per cent) and Chennai (1 per cent) was the best performer followed by western region with Mumbai (3 per cent), Pune (3 per cent) and Ahmedabad (0 per cent). Except for Gurgaon (0 per cent), the City Index for other cities in north India (Delhi, Noida and Ghaziabad) declined by 1 per cent to 3 per cent.
- Hyderabad emerges as the most conservative market with 71 per cent of consumers in the city looking for options in sub-Rs 60 Lakh segment. This is followed by Chennai and Ghaziabad with 60 per cent and 58.5 per cent preference, respectively.
Analysis of consumer preference on budget lines and juxtaposing the same with available supply brings forth the most important issue affecting the market – demand supply mismatch. It is important to note that consumer preference revealed by search data on Magicbricks website has been used here as a proxy for demand.
Regionally, north India comprising of Delhi, Noida/Greater Noida, Ghaziabad and Gurgaon saw a drop in index values. Compared to this, south and west India witnessed arise in index values of 4% and 2%, respectively. Kolkata in the east also saw a drop in index values.
NPI is the weighted average of supply and values across 11 cities in India. In line with general lack of activity in the residential real estate market, the National Property Index (NPI) has also witnessed minimal movement over the previous quarter. This is in continuation of the general trend of inactivity observed over the last 24 months.
Analysis of consumer preference on budget lines and juxtaposing the same with available supply brings forth the most important issue affecting the market – demand supply mismatch.
Analysis of consumer preference on budget lines and juxtaposing the same with available supply brings forth the most important issue affecting the market – demand supply mismatch. It is important to note that consumer preference revealed by search data on Magicbricks website has been used here as a proxy for demand.
Regionally, north India comprising of Delhi, Noida/Greater Noida, Ghaziabad and Gurgaon saw a drop in index values. Compared to this, south and west India witnessed arise in index values of 4% and 2%, respectively. Kolkata in the east also saw a drop in index values.
NPI is the weighted average of supply and values across 11 cities in India. In line with general lack of activity in the residential real estate market, the National Property Index (NPI) has also witnessed minimal movement over the previous quarter. This is in continuation of the general trend of inactivity observed over the last 24 months.
Analysis of consumer preference on budget lines and juxtaposing the same with available supply brings forth the most important issue affecting the market – demand supply mismatch.
- Gurgaon is the only city which displays a contrary trend. The sub-Rs 60 Lakh segment accounts for only 17 per cent of consumer preference in the city. And against national average of 15 per cent, 35 per cent consumer preference is in Rs 90 Lakh to Rs 1.6 Crore budget segment.
- In terms of consumer preference in the premium and luxury segment (Rs 1.6 Crore and above), Gurgaon, Mumbai and Delhi rank 1st, 2nd and 3rd. While 27 per cent of consumers looking for residential option in Gurgaon are doing so in this budget range, the same figure for Mumbai and Delhi is 22 per cent and 21 per cent, respectively. National average for this budget range is 15 per cent.
- 2BHK is the most preferred format with 47 per cent share of consumer preference. And 54 per cent of those seeking 2BHK options are doing so in sub-Rs 60 Lakh segment.
- Preference in 3BHK segment is spread more across higher budget segments; sub-Rs 60 Lakh segment has only 27 per cent share. The Rs 60 Lakh to Rs 1 Crore range accounts for 33 per cent of consumer preference with balance 41 per cent concentrated in Rs 1 Crore and above budget segment.
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