Real Estate Consumer Outlook- 2017
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Real Estate
Consumer Outlook-
2017
The beginning of the year 2017 ushered a whole lot of changes
in the Real Estate Sector. Various initiatives announced in the
Union Budget 2017-18 talked about magnifying infrastructure,
improving connectivity and providing affordable housing.
Home loan interest subsidies, infrastructure status to
affordable housing and change in the holding period of LTCG
tax are expected to spur the market.
We noticed no price appreciation of the property, attractive
offers to lure the customers, all due to the historic decision
taken by the Indian Government in the 4th quarter of 2016 –
Demonetization.
It was these aftereffects of Demonetization that the first
quarter of 2017 saw a sluggish supply in new project launch,
seemingly very low price appreciation in the existing market.
However, the Q1-2017 closed with the positive note
supported by historic plunge in the bank loans which changed
to as low as 8.4% alongwith the introduction of other
attractive schemes such as Credit Linked Subsidy Scheme to
support Pradhan Mantri Awas Yojana.
In this backdrop, QuikrHomes conducted a comprehensive
survey which captured consumer sentiments extensively. The
survey received an overwhelming response by as many as
1522 participants. It highlights the key trends that will shape
the realty sector in the coming months. To understand the
behavior of investors, the survey included:
• Socioeconomic and demographic profile of participants
• Preferred investment options
• Consumer inclination for property investment 2017
• Purpose of buying property- Investment Vs End-Use
• Investor preferred budget for property buying
• Preferred property type
• Key reasons, which hold’s consumers back while buying a
property
• Best stage of buying a property
• Expectation of annual returns on Real Estate
• Demonetization Effects
Will there be a drop in price due to demonetization?
Expected price decrease due to demonetization
Impact on transactions as per Property Market- New
Property, Resale & Land transaction
• RERA Popularity
• RERA Implications
REAL ESTATE: CONSUMER OUTLOOK | 2017 1Survey Participants Geographic & Demographic Distribution
Top 14 Cities From
India
Workplace of
% the Participants
INDIA, 96%
NRI, 4%
NCR
16%
Kolkata
4%
MMR 2%,
7%,
17% Pune
9%,
8%
Hyderabad
10% 24%,
Age group of
participants
Bengaluru
27% Chennai
58%,
10%
18 to 24 25 to 34 35 to 44
Annual Family Income
58% Under 10 Lac
45 to 54 55 to 64 65 to 74
Over 35 Lac Gender typology
Between 25 – 35 Lac Male Female
86% 14%
7%
8% Between 16 – 25 Lac
10% Between 11 – 15 Lac
Married Unmarried
17% Family Income 72% 28%
Marital Status
REAL ESTATE: CONSUMER OUTLOOK | 2017 2Best Asset Class For Investment in 2017
100% 14% 11% 4% 2% 10% 14% 2% 14% 7%
63% 70% 72%
62% 73% 66% 65% 75%
50% 79%
4%
12% 8% 9%
15% 9% 13% 2% 14% 8%
7% 10% 12% 11% 10%
7% 5% 5% 8% 5% 7%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital Region
Region (MMR) (NCR)
Fig. 1 : Best Asset Class For Investment
Fixed Desposit Gold Government Bonds Mutual Funds Real Estate Stocks
With so much action in the market, it was important to know which asset class is dominating the investors’ mind and Real Estate
again grabbed the top spot with 70 % votes in QuikrHomes Consumer Survey 2017.
From NRI investors, we received overwhelmingly response for Indian Real Estate Sector and they also marked Real-Estate
option as a best asset class for investment in 2017.
While real estate was still the first choice of respondents, the interesting aspect was to see the variation in secondary & third
preferences. Overall, Mutual Funds & Stocks got neck to neck votes, with mutual fund being the second preferred choice for Pune,
MMR and Bangalore respondents followed by Stock deposit as a third choice in these cities.
However, NCR and Tier 3 cities respondents still continues with fixed deposit as their second choice after real-estate because they
consider it to be the safe investment option and its also offers some liquidity.
In Chennai & Hyderabad, gold continue to tempt as an second preferred investment options despite efforts by government and
the RBI to curb demand for the yellow metal. While, low interest rates in the Government Bonds markets made investors stay
away from this option.
Unlike 2016, mutual funds & stocks is now the second preferred asset class for maximum
respondents across cities. Earlier, majority of the respondents across cities preferred to invest
in fixed deposit instead of mutual funds & stocks.
In 2017, would you prefer to invest in Real Estate?
120%
100%
80% 42% 53% 50%
67% 62% 55%
70% 78%
60% 100% 17% 0% 15%
40% 10% 19%
15% 45% 9%
41% 35% 11%
20% 19% 28% 28% 22%
0% 11%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital Region
Fig. 2 : Planning to Buy a property in 2017? Region (MMR) (NCR) MAYBE NO YES
The interesting question is what will be the trends from the demand prospective in 2017. It is a big relief for the industry as the
majority (57%) of respondents are planning to buy a property in 2017.
Having said that, there are still 30 per cent of respondents who are confused and thus are hesitant to make their minds about
buying or invest in a property in 2017. A small number of respondents, 14 per cent are not willing to invest at all in year 2017 as
per QuikrHomes Survey 2017.
In comparison, the survey conducted in 2016 showed only 49% people would invest in 2016. Clearly, the 2017
survey indicates a positive outlook for the real estate sector in 2017.
In Pune, about 70% respondents are planning to invest in remaining months of 2017, while 22% were not sure. Chennai,
Hyderabad & MMR also painted a somewhat similar story.
In NCR, about 50% of respondents displayed confidence, while 35% might invest. In Bangalore, nearly 42% respondents displayed
optimism while good 41% respondents displayed subdued feeling of uncertainty. A few 17% are not willing to invest at all.
REAL ESTATE: CONSUMER OUTLOOK | 2017 3Preferred Purpose of Buying Property in 2017
100%
90% 24%
38% 36% 40% 33%
80% 48% 45% 48%
70%
60% 93%
50%
40% 76%
62% 64% 60% 67%
30% 52% 55% 52%
20%
10% 7%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital Region
Region (MMR) (NCR)
Purpose of Buying Property End Use Investment
End Use
While doing a comparative study of investment vs End use, End-Use was the major
59%
motive behind buying properties among Indian residents with 64% of votes casted
in favor of End-Use & over 36% votes for investment purpose. On the contrary, we
found out that about 93% of NRI respondents were willing to buy property for
Investment
investment purpose over a meager 7 % who were interested for End-Use. 41%
As per QuikrHomes survey, overall 59 % participants would be like to buy property for End-Use and 41
% voted for investment purpose .
Preferred Budget for Property Investment in 2017
20% 4% 2% 2%
3% 0%
9% 7% 1%
5% 1%
7% 0%
100% 8% 11%
15% 19% 17% 19%
18% 18% 20%
80%
27% 26%
30%
60%
89%
40% 72% 75% 73% 75% 72%
43% 55% 46%
20%
10%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Capital Pune Tier 3
Metropolitan Region (NCR)
Region (MMR)
Preferred Budget Within 40 Lacs Between 41 Lac to 70 Lac Between 71 Lac to 1.2 Cr Over 1.2 Cr
Announcement in favor of Affordable Homes by Indian Government sent a frenzy amongst the public and consumer sentiment is
clearly dominated by the preferred budget range “Within 40 Lacs”. Preferred Budget, overall 64% of respondents chosen the
affordable budget range.
While affordable is the first choice, it is interesting to note the variations in secondary preferences. At present, “41 lakh to 70
lakh” seem to be the flavor of the season with it being the second choice among the 24 per cent respondents in overall survey.
Interestingly , only 10 per cent respondents voted for more than Rs. 71 lac budget range.
According to QuikrHomes survey, about 64 per cent participants have a budget less than Rs 40 lakh.
On the other side, nearly 40% of NRI respondents preferred their investment budget range from Rs. “41 Lac to 70 Lac” followed
by 27% NRI respondents who are interested in keeping Rs. “ 71 Lac to 1.2 cr” as their preferred budget range. A good (20%) of
NRI respondent voted for the luxury segment, who wanted to invest in projects with a hefty price tag of “Over 1.2 Cr”.
It’s also important to know the luxury segment Indian investor base city, overall only 4% respondents showed their interest to
invest “Over 1.2 Cr”. Majorly MMR, Bangalore & Chennai comes as top three cities who’s respondents wants to invest projects
with a price tag of “Over 1.2 Cr”.
REAL ESTATE: CONSUMER OUTLOOK | 2017 4Most Preferred Property - Type for Investment in 2017
0% 11%
100% 20% 23% 13% 22% 22%
26% 31% 11%
0% 4%
80% 13% 55% 0% 30%
0% 31% 30%
60% 44% 2%
4% 44%
0%
3% 45% 0% 4%
0%
40% 67% 74% 0%
4%
4% 0% 45% 50% 11%
43% 10% 43%
20% 22% 22%
14%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital Region
Preferred Property Type Region (MMR) (NCR)
Apartment Independent Floor Office Space / Retail Plot/ Residential Land Villa / Row Houses
Preferred property type depends upon the city density and availability of lands near city center or work place.
But, due to the sky rocketing price of land & non availability of barren land near city centers to build a individual house, individual’s
preference is shifting towards investing in an apartment to meet their needs. Going by the past year’s trend, respondents from
MMR, NCR & Pune are still highly inclined towards buying an apartment. Unlike H12016, “Apartments” are now the most
preferred property type for maximum respondents in Bangalore, even though earlier, majority of Bangalore buyers preferred to
buy “Plot/Residential Land” followed by “Villa/ Row Houses”.
Respondents from Hyderabad, Chennai, Kolkata & Rest of India still have “Plot/Residential Land” as their preferred choice,
followed by “Villa/ Row Houses”.
However, NRI respondents clearly want to invest in Apartment followed by “Villa/ Row Houses”.
A per survey, 45 percent respondents voted for Apartment as a their preferred property type to buy. Besides other
reasons, the result also indicates that most people don’t want to go through the hassle of building a house.
Apartment communities offer security and additional lifestyle facilities such as club house, swimming pool,
open spaces, gym, community halls etc.
Key Reasons Holding Consumers Back while Buying Property
120%
100%
26%
45% 38% 45%
80% 56% 52%
72% 70% 78%
60% 40% 21% 9%
18%
40% 22% 10% 17%
19% 11% 4%
4% 4%
28% 45% 0%
20% 15% 31% 9% 22% 26% 22%
19% 9%
7% 7% 0% 0%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital Region
Key Reasons Holding Consumers Back Region (MMR) (NCR)
Job Uncertainty Lack of Relevant Guidence Lack of Transparency Waiting for Prices to Come Down
We all know that making a decision to buy/invest in a property is not an easy task and there are various major factors which holds
consumers back, while buying a property.
According to survey, more than half of the consumers throughout the cities are still “Waiting for property prices to come down”,
whereas, “Job Uncertainty” & “Lack of transparency” were the second & third most important reasons to holding the consumers
back in megacities like Pune, Hyderabad, NCR and Bangalore.
On the other hand, NRI investors were highlighting the “Lack of transparency “ as the biggest factor with “Lack of relevant
guidance” being the next important factor with 28 percent of votes followed by 26 percent expecting the “Price Correction”.
A per survey, nearly 54 per cent votes cascaded towards “price drop” option. Interestingly, developer’s community have
already picked the consumer’s nerves and have started attractive them with lucrative offers and deals.
REAL ESTATE: CONSUMER OUTLOOK | 2017 5Preferred Stage of Buying Property?
100% 7%
0% 11% 10% 9% 13% 11%
14% 0% 19% 17%
7% 4% 11%
9% 15% 18% 6% 4% 0%
80% 33% 5% 11% 13%
31% 9% 19%
60% 13%
47% 52% 48% 56%
28% 45% 50%
40% 45%
47%
20% 24% 24%
22% 18% 17% 22% 22%
11%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital Region
Preferred Stage of Buying? Region (MMR) (NCR)
Pre-Launch Property Ready to Move In Property Under Construction Property in Early Stage
Under Construction Property in Mid Stage Under Construction Property near to Completion
Investment in property is an strategic step which hugely depends on the “Stage of Construction” in which you are buying a
property which directly effects your budget. But, due to monumental construction delay cases and large number of early-
launched properties going into litigation has made “Ready to Move In Property” a far more safer bet, among all Indian citizens for
End-Use purpose.
However, maximum chunk of NRI investors still prefers to invest in “Pre-Launch Property” & “Under-Construction Property in
Early Stage” to reap the maximum monetary benefits.
Moreover, a sizable section of prospective buyers from all over India who have investment on their minds, still prefers “Pre-
Launch Property” & “Under-Construction Property in Early Stage” to maximize their ROI.
Survey results, clearly indicates the majority of consumer sentiments are with “Ready to Move In Property”
with 54 per cent votes.
Expected Return On Investment From Real Estate?
Upto 10% Between 11% to 20% Between 21% to 30% Over 30%
100% 10% 12% 11% 13% 9% 10%
19% 26%
14% 11% 34%
15% 21% 18%
80% 22%
17%
13%
29% 36%
60% 33% 28%
42% 36% 34% 33%
35%
40%
11%
47% 40% 44% 44%
20% 26% 28% 31% 26% 22%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital
Expected ROI Region Region (NCR)
(MMR)
As the real estate industry heading towards transparency and being more organized, today’s well-informed buyers’ expectation
from realty investment has become more realistic. Similar to international investors in western countries, they no longer aspire
for high returns from their property.
Overall, 32 per cent (majority) of the participants expect up to 10 per cent annual return from their real estate
investment. Considering the current market situation, annual returns in the
range of 9-14% are relatively healthy.
It is interesting to see that respondents in all Tier 3 cities, Pune & Hyderabad markets continue to remain too optimistic about
the high return on investment. This may also be due to the fact that the prevailing prices in these cities are relatively lesser than
their other metro counterparts.
REAL ESTATE: CONSUMER OUTLOOK | 2017 6Effect of Demonetization on Property Prices - Will there be a drop in price due to demonetization?
In November 2016, the Indian government took a major step by Demonetizing the Rs. 500 & 1000 notes in order to remove black
money from the market. Real-Estate sector also got affected by this decision.
Property market in this duration was very dynamic with almost all the developers advertising their projects with lucrative offers to
attract the consumers. In an effort of providing a better deal, during the first quarter of the year 2017, developers joined their
hands with various financial institutions to offer affordable loans as well, and announced other schemes for helping buyers to take
better decisions.
It was a once in a lifetime opportunity for the buyers and the they reaped full benefit of the schemes offered by the builders and
developers.
Having said that, providing these attractive offers will just be a substitute of price decrease and another step to attract the
maximum consumers towards the industry.
Will there be a drop in price due to
demonetization? According to QuikrHomes Survey, majority of respondents are
anticipating a drop in price due to demonetization, while 14 %
not sure about the price drop.
100% A good 29% not at all expecting the price decrease due to
demonetization.
80% 59% 57% NRI respondents have very strong feeling of price decrease
with 92% votes cascaded in favor of the price decrease due to
60% 92% demonetization. However, 59% respondents from top cities &
40% 13% 57% of tier 3 cities have the same feelings.
29% Surprisingly, good 29% Tier 3 cities respondents not at all have
20% 28% feeling of price dip . While, only 13% of Top cities respondents
8% 14%
0% voted in favor of no price change due to demonetization.
A good 28% voters from Top cities are not sure about the price
Abroad (NRI) Top Cities Tier 3
drop followed by 14% Tier 3 cities respondents.
India
MAYBE NO YES
According to QuikrHomes survey, overall 57% voters still have a hope of further decrease in prices due to
demonetization.
Expected price decrease in Real Estate due to Demonetization?
Up to 10% Between 11% to 20% Over 20% No Changes in Prices
100% 7% 16% 13%
90% 26% 31% 27% 22% 23%
27% 33% 32%
80% 24% 11%
70% 10% 9% 39% 19%
22% 7% 11%
60% 18% 21%
15% 17%
50% 36% 26%
40% 59% 26%
26% 30%
30% 56%
45% 42% 46%
20% 26% 24% 32%
21% 18%
10% 7%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3 Grand Total
Metropolitan Capital Region
Expected price decrease? Region
(MMR)
(NCR)
Our analysis recoDemonetization makes a major impact here with majority of consumers expecting the price correction alongwith
the much needed transparency in the real estate market.
About 32 per cent of the respondents expected the decrease of “Up to 10 per cent” prices followed by 26 per cent expecting
“Between 11% to 20% price decrease“, whereas 21 per cent respondents expected “Over 20% price decrease”.
Surprisingly, a good 23% voters not at all expecting the price decrease as per demonetization.
mmends that respondents looking for property in Luxury Segment can see a higher price correction in a short term.
Majority of respondents are expecting “Up to 10 Per cent” price correction due to demonetization.
REAL ESTATE: CONSUMER OUTLOOK | 2017 7Welcome To RERA
In the year 2017-2018, RERA will be the biggest game changer for the real-estate industry, a revolutionary step that challenged to
change the whole system. RERA promises to help the Indian Real Estate sector appear much more stronger, transparent and
capable of prolonged and sustained growth. RERA effect also created a hype amongst the property seeker to know it’s effect on
real-estate sector. To palpate the consumer’s nerves, we posed a few questions in front of them & the answers were a mix-bag of
opinions.
Do You Know about Real Estate Regulatory Act (RERA)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune Tier 3
Metropolitan Capital
NO YES Region Region (NCR)
(MMR)
RERA’s popularity amongst the respondents was low wherein a whopping 51% of the respondents were unaware of RERA
with only 49% of the respondents being well aware about it.
Surprisingly, 100% respondents from tier three cities were unaware about RERA.`
Will RERA Make Real-Estate Sector More Transparent and Organize?
The government presented the RERA(Real Estate Regulatory Authority) Bill in the Parliament with the intention that real estate
transactions can be regulated with proper rules and regulations. The bill hopes to bring in the much-needed transparency in
property dealings through provisions for registration of real estate projects and agents with the Real Estate Regulatory Authority;
functions and duties of promoters and agents; rights and duties of allottees etc. It will lead to establishment of Real Estate
Regulatory Authority and Real Estate Appellate Tribunal in every State for registration of all real estate projects and for speedier
dispute resolution respectively. Stringent penalties have been sought to be imposed on habitual offenders. This, it is believed, will
act as a deterrent for those few erring builders who bring bad name to the developer community at large. However, some experts
expressed certain apprehensions about it saying that it will add another layer of bureaucracy in already heavy-burdened realty
sector. Some stressed on the single-window regulatory mechanism for developers and builders while few state that it should
ensure that real estate transactions are carried out in a just and equitable manner.
Will RERA Make Real-Estate Sector More Transparent and Organize?
120%
100%
80% 50% 60% 60%
76% 75% 78% 80%
60% 100%
40% 20% 0% 0%
5% 30% 13% 40% 6% 0% 40%
20% 19% 13% 17% 20%
0% 0%
Abroad (NRI) Bangalore Chennai Hyderabad Kolkata Mumbai National Pune
Metropolitan Capital
Maybe No Yes Region Region (NCR)
(MMR)
A majority, 74% of respondents showed positive response towards the implementation of RERA which is expected to make real
estate sector transparent & organized.
But, a sizable chunk of 21% respondents think that this act “Might Help” and a small 5% showed low hopes towards it’s impact on
making the Real Estate Sector sector organized.
Interestingly, NRI respondents showed maximum faith towards RERA and it’s subsequent effects on Real Estate Sector.
REAL ESTATE: CONSUMER OUTLOOK | 2017 8ABOUT QUIKRHOMES QuikrHomes is India’s leading digital real estate business. We have the largest and most comprehensive list of detailed real estate sales and rental options covering all cities and budget categories. In the highly volatile and scattered Indian real estate market it is quite challenging to understand the dynamics and make profitable investments. We help investors to take informed decision backed by real time data. We capture real estate data across India and also update historical data of supply & absorption in top cities. To ensure the most up-to-date and detailed data availability, our dedicated team/analysts monitor property activity from a number of sources, including developers and property brokers, real estate forums and property listings, as well as our own intensive research. Our research services give clients the tools to review & analyze markets and realty insights that support successful investment strategies. The solutions we provide always cater to our clients’ needs as we ensure that all captured data and all customized reports undergo thorough due diligence by our in-house audit team. Services Provided: Land Potential Assessment Customized Reports Competitive Benchmarking Study Market Assessment Reports Feasibility Reports Quarterly demand Supply Analysis Report Projects Monitoring Services Customized Surveys Tier 1 Cities Residential Projects Details with historical price & Absorption Trends Authors: Sumeet Singh Negi Meruga Pallavi Abhai Mani Chaturvedi Manager | Research & Data Senior Associate | Research Senior Manager | Research & Services meruga.pallavi@quikr.com Content sumeet.negi@quikr.com abhai.m@quikr.com For Residential Data Services, Please contact – Prashant Kumar Thakur Head of Research & Data Services prashant.thakur@quikr.com Quikr India Pvt Ltd Next to Manyata Tech Park, Back Gate No 5. Krishnarajapuram Hobli, Bengaluru-560045 Copyright © 2007-16 QuikrHomes | CommonFloor. All rights reserved. The information provided herein is based on QuikrHomes & CommonFloor data which is collected from various publicly known sources viz, websites, documents and maps including QuikrHomes & CommonFloor's proprietary data model. Projects mentioned in the report are selected solely on basis of various parameters including number of units, price range and unique selling point, among others. The selection, omission, or content of items does not imply any endorsement or other position taken by QuikrHomes & CommonFloor. The information is provided on an "as is" and "as available" basis. QuikrHomes & CommonFloor expressly disclaim warranties of any kind, whether express or implied, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose and non-infringement.
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