Why Property Buyers Are Seeking Larger Homes While home sales declined during the pandemic, they soared after the curfew was removed
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India is a nation that is increasingly urbanizing. The housing demand in cities is determined by rapid urbanization and demographic shifts. The UN World Urbanization Prospects 2018 research projects that by 2050, India's urban population will have increased from 410 million in 2014 to 814 million. By 2025, 46 per cent of Indians are anticipated to reside in cities, up from 34 per cent.
While home sales declined during the pandemic, they soared after the curfew was removed. Since 2020, sales and product releases have increased exponentially. In other situations, residential sales in cities are now returned to their pre-pandemic levels or even higher. Due to the widespread habit of working from home in metro areas, property buyers seek to relocate to larger homes. To meet their expanding wants, buyers are switching from two-bedroom to three-bedroom homes.
These buyers have a clear preference for homes that are already finished over those that are still being built. This is due to two factors. To update their homes, purchasers feel a feeling of urgency. Secondly, ready-to-move-in residences give buyers peace of mind that they will get the home they paid for. Demand for places ready to move into is partly responsible for the pandemic's swift rebound in home sales. This also applies to tier two and three cities, where housing demand is increasing.
The unexpected increase in housing demand creates several difficulties. To satisfy the needs of various urban household types and income levels, the housing supply in cities will need to be increased. Numerous issues may arise if there is not a sufficient supply of urban housing to meet demand. The biggest one is a sharp increase in property prices that has occurred far more quickly than salaries. This may lead to problems with affordability, particularly for first-time homebuyers who need help accumulating money for a down payment.
Cities are not only inhabited by the wealthy. Homes are in demand across a range of income levels. Ten million units are currently in short supply in urban areas. By 2030, it is predicted that 25 million affordable housing units will be needed. Home prices will continue to grow unless real estate significantly increases the pace of home construction. According to a recent report by the industry trade group CREDAI, the average home price in the nation has risen by 4 per cent in the past year. The most significant increase, at over 11 per cent, was in Delhi-NCR. The ability of home purchasers to purchase a property may be impacted if housing costs become exorbitant. While keeping home costs at reasonable levels, more housing buildings can aid in meeting the rising demand for homes in cities.
A consistent rise in income levels would lead to people in cities having more disposable income. This is especially true for the millennials and the GenZ customers who are looking at a bigger space to accommodate their 'Work from home' lifestyle as well. They are strategically looking at emerging micro markets to upsize their homes and invest their pent-up savings.