Despite headwinds, homebuyers depict optimism to buy properties in MMR:
2 out of 3 buyers want to purchase a home in the next 3 to 6 months as they believe prices of properties will rise
Mumbai, 27 July 2022: After establishing a strong momentum by the end of 2021, the current year has also built on the tide as homebuyers continue to stay optimistic despite the headwinds in the global economy. As per the House Purchase Sentiment Index (June 2022) released by CREDAI MCHI and TruBoard Partners, highlight 47% of prospective homebuyers in the Mumbai Metropolitan Region (MMR) are optimistic to purchase a home at the earliest predicting increased rates of loan and other commodities. The House Purchase Sentiment Index dipped by 9.5% quarter on quarter in Q1 FY23 compared to the previous quarter, but it still depicts optimism with a score of 65.5, above the pessimism threshold of 50. While rising policy rates have dented consumer sentiment compared to the previous quarter, 2 out of 3 home buyers surveyed expected prices will rise but also were certain to buy a home in the next 3-6 months. However, due to the quarter-on-quarter dip in optimism, the probability of sales conversion will remain strong in the next 6 months but may not surpass the robust momentum of H2 of FY22, owing to inflationary factors and sustained hikes in repo rate.
Despite affordability constraints like expected price rise and higher mortgage rates, homebuyers depict optimism encouraged by reviving economic outlook and higher future earnings potential. The Index indicates diversified opinions across various regions within MMR. Consumers in Eastern suburbs were the most optimistic while those in South Mumbai were most cautionary in their plans to buy a home in the next 3 to 6 months.
Credai-MCHI’s President, Mr. Boman Irani stated, “The House Purchase Sentiment Index report truly highlights the industry’s resilience in the face of adversities. Despite uncertainty globally real estate in India continues to be the prime avenue to safeguard investments as homebuyers in MMR expect home loan rates to rise but will be banking on the stability of the real estate market’s performance over generations. Due to the current stock market fluctuations, physical assets like real estate are much more stable which has enabled salaried individuals to be more likely to invest in a home. Currently, buyers in Thane are more resilient towards planning purchases than the rest of MMR. CREDAI-MCHI is constantly working with the Government for better and evolving policies to help the real estate sector.
Supporting stakeholders in India’s corporate and retail lending and investment ecosystem, Mr. Sangram Baviskar, MD – Real Estate, TruBoard Partners said, “The report highlights the perspective of prospective homebuyers, which has become a critical aspect now given the recent price hikes, increased repo rate, and loan rates. 1 out of every 4 customers aged 40-50 years who expect prices and interest rates will go up in the next 6 months, are planning to buy a home, given the next few months seem like a good opportunity for the homebuyers. Despite future challenges, MMR will continue to grow.
The report also hints at the high probability of low-risk buyers (aware of rising prices and loan rates and yet are planning to buy a home) closing deals in areas like BKC, Chembur, Lower Parel, and Powai which are emerging micro markets of MMR. In Chembur, 48% of prospective buyers are low-risk buyers while in BKC the percentage stands at 32%. Basis the industry trends and highlights of the report, CREDAI-MCHI anticipates that businessmen in eastern suburbs and Thane are more prone to this trend, compared to any other regions in MMR. Salaried people are more optimistic than business owners, however, business owners appear to have moved to the fence to gauge.
