61% homebuyers expect residential prices to increase in 12 months: Survey

Around 26 percent of mainstream Indians moved their residences within the pandemic period according to the survey released by Knight Frank. For Indian Mainstream non-movers, 32 percent were more inclined to move residences in the next 12 months, this report said.

Also, 61 percent respondents in the Mainstream Indian segment expect prices of their primary residences to rise in the next 12 months, as per the survey.

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With an objective to closely capture the impact of the Covid-19 pandemic and consequent lockdowns on residential segment consumers in India, Knight Frank conducted a two-part primary survey for the country.

Part I of the survey comprised respondents in the high-end income segment, referred to as the ‘Global Indian Segment’. Part II, on the other hand, gauged buyer sentiment in the mid-end income segment and is referred to as the ‘Mainstream Indian Segment’.

As per the survey, an overwhelming 87 percent of the respondents who desire to move homes in the next 12 months, favoured the suburban neighbourhood of their current city of residence, while 13 percent of respondents who want to relocate, may consider an alternate city.

19 percent of respondents globally have moved to a new house since the start of the Covid-19 pandemic; this rises to 25 percent in Australasia and North America. Of the non-movers, 20 percent are more inclined to move in 2021 even as the pandemic continues, according to Global Buyer Survey released by Knight Frank. The survey has analysed the impact that Covid-19 on residential buyers' attitudes to purchasing homes around the world.  

Globally, 64 percent of the respondents expect the value of their primary residence to increase in the next 12 months. In case of the Global Indian segment, which represents the higher income segment, 32 percent expect prices to rise. Reflecting a more optimistic outlook, 61 percent respondents in the Mainstream Indian segment expect prices of their primary residences to rise in the next 12 months.

32 percent of the respondents from the Mainstream Indian segment expressed willingness to move into a new home in the next 12 months as a result of the pandemic, whereas 14 percent from the Global Indian segment indicated a desire for relocation.

In a price sensitive environment, more than 50 percent across all income segments in India cited lack of willingness to pay a premium for branded residences. Marking a significant citation, 32 percent of the Global Indian segment expressed willingness to pay a premium for a greener home.

The report also emphasizes that future of work will play a significant part not only for the commercial sector but also for the residential. More than half of the respondents in the Mainstream Indian segment expect to be back in office for the entire work week once all restrictions are lifted.

47% of the Global Indian segment respondents expect to continue working for 2-4 days in a week from office once all restrictions are lifted. In the Mainstream Indian Segment, the highest inclination towards 5 days of work from office was shown by professionals i.e. lawyers, architects, doctors, chartered accountants etc. In case of the salaried class segment, the preference for work from office ranged from 3 to 5 days. This is largely due to the impact of tech-firm employees working from home.

Globally, 59% of respondents envisage working 3-5 days in a week from office once all restrictions are lifted. In the Middle East and Asia, the figure is 41% and 36% respectively.

Nearly 58% respondents in Mumbai and Kolkata expected up to 10% increase in residential prices, while 53% in Pune also have a similar expectation. More than 60% respondents in Southern cities expect up to 20% price increase in next 12 months. Around 19% respondents in Bengaluru and 18% in Chennai expected prices to increase 20% or more in the next 12 months.

The attitudes of the Mainstream Indian segment buyers in South India are fairly optimistic when it comes to spending propensity for buying new homes. 63% in Chennai, 54% in Hyderabad and 39% in Bengaluru have indicated an increase in spending propensity.

Expressing intent to purchase a new home in the next 12 months as a result of the pandemic, the Mainstream Indian segment was more inclined to purchase a home as compared to the Global Indian segment. 32%of respondents in the Mainstream Indian segment were looking to buy a home. Of the total respondents looking to buy in the Mainstream segment, 87% respondents are looking to move within the city.

In contrast, respondents from Mumbai and Pune are more inclined to move to another city post the pandemic. One in five respondents are more inclined to move houses within the next 12 months globally, due to the pandemic.

Globally, one-third of the respondents are more likely to buy a second home. Nearly 40% respondents across income segments in India are more likely to buy a second home due to the pandemic.