Connectivity, Public Transport and Down Payment attracts First Time Home Buyers

  The property market in India has seen a lot of action over the past decade. Decent economic growth, easy availability of finance coupled with high disposable income has made many young Indians look favorably at a real estate investment. What are the various considerations when a first time home buyer sets out to search for a property? Is there a change in the mindset of the home buyers? To understand this and many more questions related to the psyche of a first time home buyer, Makaan.com, the fastest growing real estate website in India, conducted a research christened “First Home Survey” that ran on the website between 23rd May to 13th June 2012 and witnessed a participation of more than 3953 first time home buyers from across the country including key cities of Mumbai, Delhi NCR, Bangalore, Chennai, Hyderabad, Pune, Kolkata, Ahmedabad, Chandigarh & more. Most of the survey takers were male, in the age group of 26 – 45 years.

   It is a popular belief among real estate players that Construction Linked plan (CLP) is preferred by home buyers as it provides protection against construction and other delays. Home buyers, however, seem to have a different take on the issue. They prefer a Down Payment (DP) plan as it comes with maximum discount. The research shows a whopping 41% home buyers preferred “Down Payment” plan. The urge for a discount is stronger than the security of a timely possession at least in case of a first time home buyer. In fact CLP is not even the second preference. Flexi Plan (FP) which is essentially a mix of Time Linked (TLP) & CLP is preferred by next 30% home buyers. This plan also offers greater discount compared with CLP. The pseudo favorite Construction Linked Plan (CLP) is favored by just 18% home buyers.

 

 

 We believe this to be an important insight into the buying psyche but limited to first time home buyers only. For people buying their second home or someone who has experienced a delay in possession, the preference will be for a CLP. Home buyers will realize their DP advantage only if their projects are handed over on time, a delay of 12-18 month will erode that advantage.