REAL ESTATE CONSUMER

OUTLOOK: H1 2016
Indias real estate market is largely emotionally driven and a lot
depends on the sentiments persisting in the market. Thus, in order to
keep the readers abreast of the current sentiments and the overall
outlook of property buyers, CommonFloor.com once again conducted
the survey titled Real Estate Consumer Outlook: H1 2016. The report
enables one to understand the expectations of property buyers from
demand perspective.

The year 2015 began with the hope of revival

for the realty sector that has been marked by
plummeted sales for quite some time now. The
beginning of the year looked promising. As Modi
government turned one, three mega missions
took shape. These include smart cities, AMRUT
cities and Housing for All by 2022, which are
expected to develop Indian cities and towns as
new engines of growth.
Revolutionary steps in the budget session like
the introduction of Benami Transaction Bill' to
control the flow of black money in the property
market and the Ordinance on the Land
Acquisition Act were also steps in the right
direction.

While the market sentiments did take a positive

turn, increasing property prices, project delays and
high home loan interest rates prevented fencesitters from taking a plunge.
In this backdrop, CommonFloor conducted a
comprehensive survey which captured consumer
sentiments extensively. The survey also highlights
the key trends that will shape the realty sector in
2016. The survey received an overwhelming
response with as many as 860 participants.
Thereafter, the information collected was analysed
in-house by our researchers and data was
correlated to the present economic condition. The
views expressed in the report are completely
unbiased.

Real Estate: The Best Asset Class for Investment!

A conventional investment portfolio of an Indian investor usually includes gold, real estate,
fixed deposits, stocks and mutual funds. But with so much happening in the market, it was
imperative to know which asset class is grabbing maximum consumer interest. Well, once
again real estate evolved as a showstopper. Genuine requirement for home coupled with
reduced interests on home loan can be attributed for this. Now, lets look at the city analysis.

100%

8.3%

11.1%

19.6%

80%

27.8%

14.3%

15.9%

16.0%
19.0%

13.5%

22.2%

9.9%

60%

8.3%
2.8%

3.7%

14.9%

16.7%

2.0%
7.1%

6.3%

42.9%

41.3%

Chennai

Pune

40%
52.8%

20%

14.3%

59.3%

50.0%

0%
NCR
Real Estate

Bangalore
Gold

In MMR, about 60 per

cent respondents voted
for real estate, followed
by NCR and Bangalore
with 53 and 50 per cent
respectively. In Chennai
and Pune, for about 43
and
41
per
cent
consumers real estate is
the best asset class for
investment.

MMR
Stocks

Fixed Deposits

Mutual Funds

While real estate is the first choice, it is

interesting to note the variations in
secondary preferences. In Bangalore, mutual
funds was the second preference with about
20 per cent respondents voting for it, while
in NCR, MMR, Chennai and Pune, traditional
fixed deposits clocked second position.
With Sensex gaining new heights every-day,
stocks clocked fourth position in all the
surveyed cities.
Gold, largely impacted by several macroeconomic factors, seems to have lost its
sheen. Moreover, factors such as no tax
benefits and zero regular income are two
major turn-offs for the investors.

Just 15 per cent consumers invested in 2015

With real estate evolving as the best asset class for investment, in H1 2015 survey we had
asked our consumers whether they will invest in property in 2015. Displaying optimism,
more than half respondents said yes.
Seeing enormous positive response, this time we asked our consumers did they invest in
2015? Well, considering the fact that buying a home is a time-taking process, few consumers
did invest this year. However, what is interesting is that good number of people are
contemplating to invest in 2016.

100%
80%

42%

36%

33%

38.8%
47.5%

60%
43%

40%

55%

45%

47%

35%

20%
21%
11%

16.3%

17.5%

MMR

Chennai

12%

0%
NCR

Bangalore
Yes

No

Pune

Might buy in 2016

Similarly in Bangalore, nearly 43 per cent did

not invest, while good 36 per cent population
is contemplating to buy in 2016. About 21 per
cent respondents managed to get a good deal.
Chennai, MMR and Pune also paints somewhat
similar story, with about 47, 39 and 33 per cent
respondents contemplating to buy in the
coming year respectively.

In NCR, 47 per cent

respondents
did
not
invest, while good 42 per
cent
population
is
contemplating to buy in
2016. Just 11 per cent
respondents managed to
get a good deal.

Key Reasons Holding Consumers Back

Buying a home is one of the biggest decisions that one makes. Thus, several factors are at
play-budget, location, project, BHK, amenities, and the list goes on. Even if any one of the
factors is not conducive, potential buyers tend to take wait and watch approach.

100%

8.3%

15.6%

12.3%

11.9%

11.1%

9.9%

7.1%

3.2%
9.5%

9.9%

14.3%

6.3%

4.9%

4.8%

63.0%

61.9%

MMR

Chennai

8.3%

80%

5.6%

12.2%

8.3%
15.6%

60%

6.8%

40%
69.4%

69.8%

49.7%

20%
0%
NCR

Bangalore

Waiting for prices to come down

Job Uncertainty

Confused between multiple options/builders

Lack of relevant guidance

Pune

High risk of Construction Delays

Thus, we also asked our consumers what is

holding them back from buying a property.
Well, in all the five cities, consumers are
waiting for prices to come down.
Interestingly in NCR, job uncertainty,
construction delays and lack of relevant
guidance garnered equal interest.

Job uncertainty, the

second reason holding
consumers in 2015, has
taken a backseat this
year and is replaced by
high risk of construction
delays in Bangalore, Pune
and MMR. While in
Chennai, respondents
were not able to decide
over multiple options.

Most Preferred Ticket Price

Budget is one of the most crucial factors in buying a property. Thus, we asked our consumers
their preferred budget for investment in 2016.

100%

5.6%

5.5%

10.1%

1.6%
10.3%
16.1%

13.9%
24.8%

80%
60%

41.7%

16.5%

17.9%

29.1%

28.2%

44.3%

43.6%

48.4%

40.7%

40%
20%

38.9%

33.9%

29.0%

0%

NCR
Within 40 Lakh

Bangalore
41 lakh 70 lakh

Rs 40-70 lakh is the new

preferred budget for NCR,
Bangalore
and Pune.
Interestingly, new supply
is also in sync with buyers
preference. In Pune, 74
per cent new supply was
within Rs 70 lakh, followed
by NCR and Bangalore
with 68 and 62 per cent
respectively.

MMR

Chennai

71 lakh 1.2 crore

Pune

1.2 crore onwards

In MMR and Chennai, like last year, within Rs

40 lakh is the most preferred budget. This
clearly indicates that buyers are more
inclined towards a regular apartment with
necessary amenities instead of plush
residences. As per CommonFloor Real
Insights, MMR and Chennai recorded 38 and
33 per cent new supply respectively within
Rs 40 lakh in 2015.

Preferred Property Type

Chennai displayed equal demand for plots, independent houses and villas with about 15 per
cent each.

100%

0.7%
6.2%

2.8%
2.8%

2.6%
3.8%
1.3%

15.0%

1.6%
1.6%
1.6%

19.9%

80%

15.0%

60%

75.8%

80.6%
58.9%

40%

91.0%

55.0%

20%
13.9%

14.4%

NCR

Bangalore

0%
Land/Plot

Apartment

1.3%

MMR

Villas/Row Houses

Second spot was secured by plots and

layouts in NCR and Pune, while in
Bangalore villas and row houses secured
second position.
Villas, independent houses and commercial
properties recorded miniscule interest
among consumers in most cities.

15.0%

19.4%

Chennai

Pune

Independent House

Commercial/Retail

Defying conventional market

trends in H1 2015, plots
emerged
as
the
most
preferred property type for
investment with about 48 per
cent respondents voting for
it. However, once again,
consumer interest has shifted
back to apartments in all the
surveyed cities as maximum
buyers are considering to
buy for self-occupancy.

Preferred Construction Stage for Buying

At what stage would you buy a property? Well, as expected, maximum respondents voted for
ready-to-move in within one year in all the five cities.

100%
80%
60%

69.4%

66.2%

61.7%

62.8%
73%

40%
13.3%

20%

24.4%

11.1%

17.9%

19.4%

15.9%

12.8%

17.5%

NCR

Bangalore

MMR

Chennai

10.0%

25.0%

0%
Pre-launch

Under-construction

As prospective buyers
are looking for self-use,
they would require a
property that is ready for
possession within one
year. Due to inordinate
construction delays, high
demand for ready-tomove-in properties was a
major trend not just in
2014 but also in 2015.

Pune

Ready-to-move in (within one year)

Considering
the
monetary
benefits,
consumers in Pune, NCR and Chennai opted
for pre-launched properties as their second
option with 25, 19 and 18 per cent
respectively. While displaying little cautious
approach, consumers in Bangalore and MMR
preferred under-construction properties as
their second option.

For more information contact:

Meha Singla
meha.s@commonfloor.com

CommonFloor.com, Bangalore
maxHeap Technologies Pvt Ltd
Tower B, 7th Floor, Diamond District,
#150, Old Airport Road, Kodihalli,
Bangalore 560 008

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