Real estate most preferred investment choice, gold least favoured: survey

Real estate has emerged as the most preferred investment asset class while gold is the least favoured, according to the  Anarock Consumer Sentiment survey for the first half of 2023.

Over 60% of respondents said they preferred real estate,  up 3% from the previous survey. In contrast, preference for gold witnessed a consistent drop, ranking at the bottom of respondents' investment options. Only 5 per cent viewed gold as their preferred choice of investment. However, FDs have experienced a  boost in the wake of rising interest rates. 

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Moreover, with home loan rates remaining stable (at approx. 9.15% average), housing sentiment remains robust; however, 98% of survey respondents feel that if they breach 9.5%, it will impact their buying decisions significantly.

High inflation has impacted disposable incomes of over 66% respondents in the H1 2023 survey, against 61% in the H1 2022 survey, indicating increased financial strain on individuals and households. 

Persistent inflationary trends globally and in India since the onset of the pandemic and Russia-Ukraine war has directly impacted disposable incomes. The impact is yet to reflect in housing sales across cities; however, any further increases will crimp residential sales growth, noted the report.

End-users continue to dominate housing sentiment, with 67% of survey participants intending to buy properties for self-use - an expected trend as homeownership provides security in an uncertain economic climate.

Meanwhile, 52% millennials & 35% Gen-X respondents will use their investment gains from other asset classes for buying homes in the future.

Despite rising property prices and interest rates hikes in the last one year, 59 per cent of home buyers will still opt for mid-range and premium homes, priced from Rs 45 lakh to Rs 1.5 crore, revealed the survey. This is a 10% sentiment increase for homes in this budget category since 2020. Homes priced between Rs 45-90 lakh are most favoured (by 35% of respondent homebuyers), closely followed by 24% respondents preferring homes priced between Rs 90 lakh to Rs 1.5 crore.

"Demand for bigger homes remains undeterred, with 3BHKs once again superseding 2BHKs in the current survey. Around 48% of property seekers prefer 3BHKs over other configurations, while 39% still prefer 2BHK units. If we compare with the H1 2022 survey, demand for 3BHKs has been rising steadily - from approx. 41% in H1 2022 to approx. 48% in H1 2023. Bigger homes remain the top pick despite life returning to normal after the pandemic," said Anuj Puri, chairman of Anarock Group.