A significant portion of housing demand in the affordable housing segment is coming from first-time buyers. Here is what is driving the trend
The last two years have been a real rollercoaster ride for the real estate sector at large – from witnessing a historic lull period during lockdown 2020 to gaining almost full momentum in 2021, and now 2022 is anticipated as the year of recovery.
On one hand, multiple lockdowns majorly affected the real estate sector but proved to be a game-changer as it brought about a much-needed realisation of the benefits of owning a home. The ensuing boom in specifically the affordable housing category was fueled by first-time home-buyers.
First-time home-buyers face a larger number of entry barriers. Most times, the largest hurdle is financing the purchase. However, the need for a tangible asset that offers stability and security for the future coupled with the remote working trend fueled the urge to own a home.
Despite this limitation, the affordable housing segment accounted for 50 per cent of new real estate launches in 2020 and is expected to continue gaining traction in the post-pandemic market. As per recent data, loans under Rs 30 lakh constituted a whopping 72 per cent of the total number of home loans applied for in 2019. This spurt was fueled largely by first-time homebuyers.
Some of the reasons why the demand for affordable homes is witnessing growth, especially from first-time buyers are:
These announcements will continue to boost demand for residential properties and also help to bring in more new supply within this segment.
These townships give their residents all the basic amenities to make sure that there are minimal interruptions in their day-to-day lives. The project promises and offers the amenities of townships but at small proximities and areas. This trend is also fueling the real estate growth in key micro-markets; especially in metros like Mumbai. The upgraded convenience that these projects offer perfectly fits with the fast-paced life of today’s first-time home-buyers. This is why affordable and convenient homes in integrated townships is another demand trend that real estate is witnessing today.
The developer community is also focusing on these key micro-markets offering multiple home options in this segment ranging from carpet areas approximately 350-550 sq ft plus for 1 and 2 BHK. Proper support by relevant government bodies and agencies and incentives from the developers has made it possible for the buyers ready to take up the sizeable expense in a significantly slow economy.
– The author is senior vice-president, NAREDCO
– The views of the author in this article are personal and do not constitute professional advice of Times Property