Online search for property dips by 15% to 20% after demonetisation
Drop in searches for properties worth Rs 50 lakh and above but traffic for rentals goes up by 8% to 10%real estate Updated: Nov 21, 2016 19:01 IST
Realty websites too are feeling the heat of demonetisation.There has been a dip of almost 15% to 20% in the number of people searching for properties online over the last few weeks due to uncertainty in the market because of which home buyers are adopting a wait and watch approach.
There has been a 15% to 20% dip in search traffic of properties worth Rs 50 lakh to Rs 80 lakh in cities such as Delhi and Mumbai and some Tier 2 towns such as Surat, Baroda and Ahmedabad. This latent demand is likely to rebound in the next three months once clouds of uncertainty go away, says Narasimha Jayakumar, chief business officer, 99 acres, a realty portal.
Traffic in the mid segment market generally comprises of genuine buyers who are hoping that prices may correct in the next five to six months. Southern markets such as Bengaluru and Chennai are sluggish but there is no major dip in the number of hits.
Affordable housing in the range of Rs 25 lakh to Rs 30 lakh is not a challenge and searches are happening as uncertainty in this segment is less. Property worth Rs 25 lakh is not likely to see prices falling to Rs 20 lakh, but chances of the price of a Rs 80 lakh property going down by another Rs 5 lakh are more, Jayakumar says.
Yet another trend observed by real estate experts is that traffic for rentals has increased by 8% to 10% as those who have put off their buying decision due to uncertainty in the market are now renting out for a further period.
As for the luxury market segment and the second homes market, there is a pronounced dip of 25% to 30% in the number of searches for properties above Rs 5 crore. “There is a demand compression as people are wary of investing in real estate at this point in time,” says Jayakumar.
Ankur Dhawan, chief business officer, PropTiger, also confirms a drop of almost 30% in the number of property searches in the first week of the demonetisation drive. Traffic was diverted to blogs on how the markets had reacted to the clampdown on black money in real estate. “While site visits have gradually picked up since the weekend, people are not concluding deals online. Queries range from what is available, whether prices have actually dropped, and deals in the market. Nobody, however, is willing to take decisions in a hurry. We are hoping that the market will pick up in the April-June quarter,” he says.
The story is more or less the same for loan websites. Customers are expecting more rate cuts from banks and from the property market side. Search trends reveal that more people are looking at what their loan eligibility is and whether it will increase once more rate cuts are announced.
“We are hoping that demand will rise by 20% to 30% once home loan rates are reduced as more people will be eligible to take a loan at a lower rate of interest and their EMI eligibility is also bound to increase. Right now most people are trying to identify how much loan they can take online,” says Rishi Mehra, CTO and co-founder, Deal4Loans.
Interest has increased in the Rs 20 lakh to Rs 50 lakh loan category by almost 12% to 14%, Mehra says, adding that there has been a dip of almost 50% in loans worth Rs 50 lakh to Rs 70 lakh. Another trend is that the major traffic online comprises of the salaried class. Traffic of those who are self-employed or run small business have seen a drop of 35% in demand.