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Evolving Consumer Preferences In Home Buying
Accommodation Times  |  May 15, 2019

Rakesh Reddy

The Indian real estate sector made a strong comeback in 2018 especially in metros and tier 1 cities. It was a year of consolidation and revival. With improved regulatory policies and rationalized tax structure, the real estate market is stabilizing and is expected to grow in 2019. The implementation of RERA has enhanced the overall real estate climate and renewed buyer confidence across India, especially Hyderabad. The resulting transparency from RERA has forced builders and approval authorities to maintain high levels of compliance and efficiency.

 

Hyderabad’s residential real estate market witnessed considerably higher demand across all segments, as compared to other major cities in India over the past year. While the leading real estate markets including Delhi, Mumbai and Kolkata were adversely impacted by the recent policy intervention and are still stabilizing, Hyderabad has been growing quarter on quarter. Among India’s seven major cities, research shows that Hyderabad is the only city where property sales have grown.

 

As Hyderabad consolidates its growth strategy of building industry hubs and integrated townships, many areas in the city are gaining interest in their location, connectivity and investment potential. This strategy is encouraging new growth corridors to be identified, which addresses the increasing demand.

 

While luxury housing continues to maintain strong demand in India, builders are becoming increasingly inclined towards building affordable housing projects, especially with the Government’s support. The Housing for All initiative aims to build 20 million affordable housing units across India by 2022. Since it is the most incentivized segment due to its infrastructure status, many reputed builders are now launching projects in the affordable segment.

 

In the latter half of 2018, there was a surge in the supply of housing units with approximately 50000 new units launched across Delhi, Mumbai, Chennai, Bengaluru, Pune, Kolkata and Hyderabad. With affordable housing gaining momentum, homebuyers can look forward to a wide range of affordable projects to purchase. In Hyderabad, attracted by growing job opportunities, consumer demand for affordable housing has increased exponentially.

 

With the increasing supply of housing units, more configuration options will be available to the homebuyer. Among the most preferred configurations, 1 BHK apartments are the most popular in Mumbai, with 2 BHK apartments being the predominant option most other major cities including Delhi, Bengaluru, Pune and Hyderabad. Affordability continues to be the primary reason behind the popularity of smaller units in Mumbai. Also, smaller apartments are easier to sell than larger configurations as the demand for 1 BHK units outweighs supply in Mumbai. In other cities, due to lower property rates, the same principle applies to the 2 BHK configuration. The majority of homebuyers in Hyderabad are families, so the preferred configuration is 2 BHK and 3 BHK apartments, with 2 BHK being the most popular.

 

Equally important to the house configuration are the amenities being offered. Common amenities include recreational facilities, swimming pool and a clubhouse. A gated community offers access to many of these amenities in addition to security and property maintenance. There is also the added benefit of being surrounded by lush and green environs. Hyderabad is uniquely positioned in terms of value-for-money for both home buyers and investors. A 2 BHK apartment in a premium gated community in Hyderabad would range in Rs 60-80 lakhs.

 

The reduction of GST on under-construction and affordable housing properties is a significant fillip for the real estate sector. The lower GST rate reduces the pricing disparity between under-construction and completed properties. A reduction in price will also dispel hesitation associated with under-construction properties. This move will spur demand for new projects moving forward.

 

The past two years have seen numerous policy changes that will greatly impact the real estate sector including RERA, GST and affordable housing. While these changes have invariably caused short-term challenges, the real estate sector expects greater market stability, increased demand and growth over the long term.

 

By Rakesh Reddy, Director &ndash Aparna Constructions

 

(The views expressed by the author is his own)