1. Current perceptions on prospects of realty market
The Index revealed latent demand for real estate market as first time hopefuls wait for the market to turn favourable soon. Despite the slow economic growth, a healthy 44% believe that 2013 is a good year to invest. However, as much as 61% of respondents prefer to postpone their buying decision to later this year, signaling that they are hopeful of festive discounts and offers. The remaining 39% do not believe that there will be any benefit from such postponement and they might as well buy now.
Consumer dissonance over the prospects of realty market is not the evident sentiment among consumers across the country, as less than half of them (46%) believe that market conditions are unfavourable for buying real estate, while the rest feel otherwise. However, despite the reported soft sentiment among consumers towards real estate investments, it is surprising that out of the above 46%, only 18% feel that the situation has significantly worsened when compared to last year.
2. Perceptions about realty market in 2014
Regarding the future course of the realty market, consumers seem to be looking forward to some clear directions from the polity and economy to unfold early 2014. Only 31% of the respondents are not sure of the further improvement of market conditions in the year 2014. Over 66% of respondents are divided equally on their belief of whether or not the market will improve over the next one year. 11% feel that there will be no change in the situation.
3. Rising property prices and overall economic conditions rank as top consumer worries
Rapid rise in property prices is the chief worry among consumers. This, coupled with the overall economic condition and lack of direction in the real estate market are top hurdles for consumers, in their buying decisions. As much as 15% of respondents are spurned off by the lack of correct information. This points to a gap in communication between sellers and buyers, a need that the industry must address right away. Around 22% of respondents think that the overall unstable market and depreciating economy would affect their ability to purchase a property in the present context.
4. Bank loans top the source of funds for real estate
The Consumer Sentiment Index indicates that 61% of consumers are dependent on bank loans, while 31% can self-finance their property purchase. This only reiterates the high dependence of realty market performance on home loan availability and indirectly, the job market. This is particularly true for the salaried class, which is a majority participant in the survey.
The first CommonFloor National Consumer Sentiment Index is evidence that consumers are sitting on the fence, waiting for the opportune season to invest. However, this intent to invest is marred by unclear messages from the market, uncertainty regarding jobs and overall economic growth and above all, speculation-
Sumit Jain, Co-founder and CEO, CommonFloor.com said, “Amidst uncertain economic conditions, property as an asset class has emerged as a clear charmer for consumers and investors alike, when compared to most other assets. The CommonFloor Index reveals that consumers are waiting for the right time to invest and show a strong willingness to own real estate. We believe that the CommonFloor Index reflects the pent up demand coupled with delayed decision-making among prospective buyers. With the festive season around the corner and attractive schemes being offered by builders, we are hopeful that many buyers will go for purchase in the coming quarter, easing the market situation and resulting in better numbers for developers.”
“We believe that this is the right time to launch India’s first consumer sentiment index that will measure perceptions about this industry among consumers. While there are numerous analyses on the supply side, an index for the demand side will offer insights to the real estate industry about the expectations from customers.” he added.