Demand for 3-bedroom homes higher than other choices for first time: Report

Buyer demand for three-bedroom homes overtook that for smaller ones for the first time as real estate remains the top choice for investment, said an online survey conducted between January and June 2022.

At least 44 per cent of respondents preferred 3BHKs and 38 per cent 2BHKs, said the CII-ANAROCK Consumer Sentiment Survey that had 5,500 respondents across digital platforms.

A similar survey conducted in the first half of 2021 showed 46 per cent of respondents preferred 2BHKs and 40 per cent voted for 3BHKs. Demand for 4BHKs increased 5 per cent from pre-pandemic levels, said the latest survey.

As many as 33,210 housing units priced at Rs 5 crore or more each were launched in seven cities in the first half of 2022. For comparison, the first half of 2019 saw just 16,110 units launched in this segment.

"The demand for homes with prices more than Rs 1.5 crore continues to grow," said Anuj Puri, chairman of Anarock Group. Compared to the pre-Covid 2019 survey, there has been a 4 per cent rise in the vote share for these homes in H1 2022. Buoyed by the increasing demand for luxury homes, developers have also significantly increased the new supply in this category in H1 2022.

The pandemic’s effect on demand for home sizes continues across top cities. The reopening of offices and schools has changed little about this trend, he said.

Investors with 8- to 10-year investment horizon have the most positive outlook in the first half of 2022. More than half of the respondents told the survey they feel that the current housing market is a better investment proposition than it was 12 months ago.

The survey also highlights that while ready-to-move homes still draw top buyer demand, the demand gap between ready and under-construction options continues to narrow. The ready vs. new launch demand ratio is 30:25 in the H1 2022 survey, while it was 46:18 in the H1 2020 edition. The residential market remains dominated by end-users, with 69 per cent of respondents looking to buy homes for self-use.

Buying homes with capital gains from other investment asset classes like the stock market and mutual funds is the top priority for millennials and Generation X – with 56 per cent and 38 per cent respectively voting in its favour.

Bengaluru and Chennai drove the highest demand for 3BHKs with 51 per cent and 48 per cent of respondents voting in favour for such homes. Hyderabad, where demand for larger BHK configuration has always been high, is seeing some reversal in trend. More than 49 per cent of respondents looking to buy in the city prefer a 2BHK.

Inflation is a concern for homebuyers. As many as 61 per cent of respondents declared their disposable incomes as "majorly impacted". As many as 92 per cent said the economy will either stay at current levels or marginally improve in 12 months.