Track2Realty Investment Survey
Until the lion learns how to write, every story will glorify the hunter, says an African Proverb. Research report by various industry stakeholders try best to paint a rosy picture; force feed the collective consciousness that the real estate market is on its way to historic high in the year 2021. But the mood of the nation is juxtaposed to the orchestrated euphoria and Track2Realty Investment survey finds that the real estate has slipped as the 3rd choice for a vast majority of the Indians, with C-SAT Score (Consumer Satisfaction Score) all time low.
As many as 44% Indians would prefer to invest in stock market; 36% would invest in gold; and only 20% Indians would invest in real estate in the year 2021. In terms of the satisfaction rate with the investment portfolio, more than half, as many as 52%, Indians voted for the traditional investment product like Gold.
Being rejected is bad but being pre-emptively rejected is worse. More than three out of the four Indians, as many as 78%, dismiss any idea of buying an under-construction property. Worse even, 84% would prefer to buy property in the secondary market where the distress sale is offering them far better deals today.
These are the findings of an online poll by Track2Realty. Track2Realty interviewed the Indians across the segment as well as the NRIs & HNIs to understand the mood of the nation with respect to the investment decision. In this qualitative survey a structured question was sent to the respondents and the choices and concerns of the investment were related with Macro-economic uncertainties, Job outlook, Safety of investment; Risk appetite; ROI; and Liquidity concerns.
The survey also explored as to what actually has deterred the mood of the Indians with the real estate, that was till recently the first choice for them. Additionally, what makes other investment products more attractive. 50% Indians find property to be high risk & low return investment. Compared to this, gold stands out as low risk & moderate return by 62% Indians; while 52% Indians feel stock market is high risk but also high return investment.
The satisfaction index of the Indian home buyers is pretty low. Not even two out of the ten home buyers are satisfied with their property purchase. The study finds that the C-SAT Score (Consumer Satisfaction Score) of the Indians is as low as 19.5.
As a result, not even 10% prospective home buyers are ready to commit for a new launch housing project. As many as 92% Indians wish to buy only ready to move properties. What actually is driving the home buyers away from an under construction property? Project delays was cited as number 1 reason by as many as 80% buyers. 74% buyers blame the builders for huge gap in promise and performance. Poor construction quality & post possession hassles was cited as a concern by no less than 70% buyers.
It goes without saying that the ready to move property is in demand. The survey also tried to understand the psychograph of the home buyers to understand whether it is just “safety first” and “you get what you see” mindset that is driving the buyers. In a qualitative survey the home buyers opened up with reasons of their choices. According to them, the FOMO (Fear of Missing Out) was a driving factor till there was 10-12% appreciation year on year; thus making the ready property way too costly.
In a market of no/moderate appreciation, their concerns with new launches & under construction are even beyond the developers’ fault lines:
Needs change by the time property is delivered (65%)
Financial condition changes in a span of 4-5 years (58%)
Tastes change during the construction life cycle (54%)
What could come out as consolation for the Indian real estate developers is the fact that the appetite for the realty stocks are way higher than a piece of property. No less than two third of the Indians, as many as 64%, find realty stocks a better option for parking their money than the property.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless
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