Leading property consultancy firm Knight Frank on Wednesday released the Global and India Buyer Survey. The survey revealed that 61 percent of homebuyers in the Mainstream India segment expect house prices to rise in the next 12 months. This survey analyzes the impact that the COVID-19 pandemic has had on the attitudes of homebuyers across the world. The report specifically mentions that 19 percent of the survey participants from around the world have shifted to their new homes at the beginning of the pandemic.
In Australia and North America, this number has increased to 25%. Even as the pandemic continues, 20% of the people who have not shifted to their homes are quite willing to buy their homes by the end of 2021. Knight Frank conducted a two-part primary survey for the country with the aim of getting a closer look at the impact of the COVID-19 pandemic and the subsequent lockdown in India on homebuyers.
Two-part Survey
People from higher income groups participated in the first part of the survey, referred to as the “Global India Segment”. On the other hand, the survey deeply assessed the sentiments of homebuyers in the middle-class income group. They called this the “Mainstream Indian Segment”. The Indian version of the survey shows that 26 percent of mainstream Indians shifted to a new home during the pandemic. These people changed their homes for many reasons. These people needed more space in their homes and wanted to be close to their family and friends. In India, 32 percent of the mainstream people who have not yet shifted to their home are willing to move to their new home in the next 12 months.
87% of people want to shift to a semi-urban area of their city
87% of those who participated in the survey and wanted to move home in the next 12 months wanted to move to the suburbs of the same city they lived in, while 13% of those who wanted to buy their own house surveyed I said that he might consider settling in another city. Worldwide, 64 percent of those surveyed said they expect the prices of their existing homes to rise in the next 12 months.
50% of people are not willing to pay any premium for branded homes
In the Global India segment, which represents the high-income segment, 32 percent of people expect house prices to rise. Giving a glimpse of the optimistic outlook, 61 percent of the survey participants in the Main Stream Indian segment said they expect the prices of their existing homes to go up in the next 12 months. 32% of the survey participants in the mainstream Indian segment expressed their willingness to shift to their new home in the next 12 months as a result of the pandemic, while 14 people surveyed said that they would leave their current location and want to settle elsewhere. In today’s era of rising inflation, more than 50 percent of all income groups said that they are not willing to pay any premium for their branded homes.
How much is estimated to increase in house prices
Two-thirds of the world’s participants in the survey expect the price of their existing homes to rise. Many of these people expect an increase in the price of their existing homes by 1 percent to 9 percent in 12 months. This idea coincides with Knight Frank’s concept of the Prime Global Forecast Index. The Prime Global Forecast Index has also stressed that they expected worldwide home prices to rise by 4 percent in 2021. In the context of India, the mainstream India segment is seeing more enthusiasm for home purchases than the global Indian segment. He is also more optimistic.
In the survey, about 58 percent of people in Mumbai and Kolkata expressed their expectation of a 10 percent increase in house prices, while 53 percent in Pune expected the same. More than 60 percent of the people in the South Indian cities that took part in the survey expect their house prices to increase by 20 percent in the next 12 months. 19 percent of the people surveyed in Bengaluru and 18 percent in Chennai expect their house prices to increase by 20 percent or more in the next 12 months.
What about working from the office
Significantly, 32 percent of the global Indian segment respondents expressed their willingness to pay a premium for homes that promote a clean environment. The report emphasized that in the future, the way people do their office work will have an impact not only on the commercial but also on the residential sector. More than half of the survey participants in the Mainstream India segment expect to go to work throughout the week once all restrictions, while 47 percent of the global Indian segment expects all restrictions to be lifted. After that, he will continue to work from the office for 2-4 days a week.
In the mainstream Indian segment, there was a strong inclination of professionals like lawyers, architects, doctors, chartered accountants, etc. to work from the office 5 days a week. People in the working class expressed their willingness to work for 3 to 5 days in the office. It can largely attribute this to the impact of tech firm employees working from home. 59 percent of the people worldwide who participated in the survey thought of working in the office for three to five days, once all restrictions are lifted. In Middle East countries and Asia, this figure is 41 and 36 percent, respectively.
Two more trends surfaced in a few months
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “The pandemic has changed the way people look at owning homes. Two trends have emerged over the past few months around the world. The question of location has first raised the ambition of the first few buyers. He is looking for a second home for himself, which will give him a special lifestyle and fun, which he has missed so far. Secondly, people are taking a more defensive stance, rebalancing their portfolios with their focus on buying the tangible asset, due to low savings rates and the tremendous boom in the stock market.
He said, “The pandemic has changed the perception of homeownership among people of different income groups in India. Our Buyer survey confirms that 32 percent of the people who want to buy a home in India have expressed their desire to move away from that place. It has been observed that the spending propensity and preference for a particular type of home continues to top the list of homebuyers in India. Apart from this, several other factors, such as access to open space, health care facilities, and proximity to home from the office, have also started to play a major role in deciding their choice. Many people are also getting attracted towards electricity-saving homes. This concept is slowly becoming a priority for homebuyers in India.”
What about the budget when buying a house?
Sharing details on spending trends to buy a new home, the report said that the mainstream Indian segment indicated an increase in the budget for owning a home. More than half of the people in the global Indian section who took the survey did not show any change. The trend and outlook of the mainstream Indian section in South India is quite optimistic as far as open spending to buy a home is concerned. 63 percent in Chennai, 54 percent in Hyderabad, and 39 percent in Bengaluru showed that they would like to spend more to buy a home. People in the mainstream Indian segment showed more interest in buying a home than the global Indian segment, expressing their willingness to buy a new home in the next 12 months because of the pandemic.
A third of people are likely to buy their second home
One-third of survey participants from around the world expressed the possibility of buying their second home. Nearly 40 percent of people across all income groups surveyed in India expressed their desire to buy a second home due to the pandemic. The need for outdoor space and privacy is understood to have prompted and put pressure on homebuyers in the global Indian segment of India, the UK, and the US to evaluate the possibility of buying a second home. The demand for home studies and work from home in India has also seen an increase in the inclination of people in the mainstream Indian segment to buy a second home.
