Revised norms for affordable housing reflects changing consumer preferences
Government’s recent decision to revise the carpet area for Pradhan Mantri Awas Yojana (PMAY)seems to be reflected in the latestMagicbricks Consumer Search Trends, which revealed thatover the last 12 months consumer preferences in both 2&3BHK is now shifting to larger apartment sizes in 1250-2000 sq.ft.
Magicbricks Consumer Search Trends over a period of 12 months validates that consumers are not only opting for larger homes but also prefer relatively expensive localities. Government’s decision – that comes into effect from January 1, 2017–for houses eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS) will certainly boost transactions in affordable housing as Magicbricks Consumer Search Trends reveal a positive shift in pent-up demand for consumer preference towards larger houses in this category.
According to Magicbricks Consumer Search Trends, consumer preference in case of 2BHK is increasing in 1250-1500 sq.ft and 1500-1750 sq.ft and in 3BHK it is increasing in 1250-1500 sq.ft, 1500-1750 sq.ft and 1750-2000 sq.ft category.
Commenting on the change in consumer preference, Mr. Sudhir Pai, CEO, Magicbricks said: “Our analysis shows a growing consumer inclination for larger homes in 1250-2000 sq.ft range. As speculators exit the market and end users remain as the only buyers, developers are conforming to user expectations and building where the demand is. The affordable homes segment is probably the only segment in the market where demand currently outstrips supply. The government’s decision to increase the carpet area of houses eligible for interest subsidy will certainly attract more developers and homebuyers towards the segment. The PMAY has also offered tax breaks and incentives to builders to develop houses that meet end user demand. In the new regime of RERA and GST enforcement, buyers are protected from inordinate delays and poor construction quality. We expect technology, quality and timely delivery of rational sizes of housing units to drive the aspirational middle class to start buying without fear of delay.”
A closer look at the budget-wise break-up also throws up interesting facts. While the affordable/mid segment of homes <80Lacs remains the largest segment by far, there has been a 10% quarter-on-quarter growth in the 80-150 Lakh homes category which translates to an almost 40%+ growth in the number of property seekers in this category from last year; thus indicating a shift in consumer preferences towards this mid-level budget segment. The upmarket segment of homes >1.5cr remains sluggish with a small growth in buyers from 52K to 54K in this period.