Resilient real estate, emerging trends shaping strong market outlook despite pandemic
India’s booming real estate sector has seen indomitable resilience in the face of the Covid shock that hit the segment last year. Despite the initial setbacks, the sector quickly adapted to the new normal thanks to digital methods and quickly got back on the road to recovery. Showing promising growth, huge sales were recorded in the third and fourth quarters of 2020 which continued through April 2021.
The second wave of Covid’s spread has surely disrupted the steadily rising growth trajectory and partial lockdowns and movement restrictions are sure to have a ripple effect. However, the real estate segment is this time well prepared with proven methods whereby the break will be temporary. Mass inoculation campaigns and improved recovery rate also boost confidence in market sentiment.
A silver lining appeared when signs of recovery were recorded in early 2021. According to Knight Frank, residential property sales in eight major cities rose 44% during the January-March period of this year for reach nearly 72,000 units as demand recovered. Trends also show that 80% of potential buyers are looking to acquire a home within the next year, while 65% of buyers prefer homes ready to move in in 2021. Low interest rates, favorable government policies, flexible payment plans , easy investment opportunities and the use of technology have played a key role in driving this growth.
New trends are constantly emerging in these changing scenarios. The extended work of home cultivation is likely to remain, and people will continue to demand more spacious homes. Both Tier 2 and Tier 3 cities will see an increase in demand as people will be eager to buy properties in their hometowns. High-rise apartments, gated townships and luxury towers with well-managed infrastructure will continue to dominate the ultra-luxury segment driven by NRIs, UHNIs, expats, business leaders, among others. Interest rates are at their lowest and RBI rate cuts have boosted demand. This trend has allowed buyers to move forward in their purchasing decisions. The real estate industry has always been a favorite with investors and a buyer’s market. With higher and more secure guaranteed returns, the sector has attracted investors and the trend is expected to continue through 2021.
Ready-to-move-in spaces will be in demand as buyers want to avoid waiting for their properties. These properties eliminate market risk and are safe choices. Properties under construction take time and in a rapidly changing world where buyer preferences change rapidly, ready-to-move premises have become an attractive offering for them. Digitization will play a central role in the growth of the sector in the market. Real estate dealers and buyers have embraced digital ways to communicate, research and buy. Negotiations, research, inquiries take place online.
These trends are likely to evolve and continue in the days to come for a digital future. Trusted developers with strong financial backing and proven track record will gain higher market share. People will look for developers who can meet their demands by matching emerging trends to their preferences through the use of technology. Customer focus will become the norm and eventually lead to better customer satisfaction.
A rise in real estate prices is also expected with the economic recovery and the deployment of vaccines. Foreign investment will continue to be dynamic as there has been good demand from foreign investors for quality assets in India, demonstrating confidence in the sector. With the ease of investment opportunities, REITs will continue to be the key theme and gain traction in the market over the coming period. So far, the resilience of Indian real estate during the pandemic has increased its value, resulting in greater attention from the stakeholders involved. As soon as the pandemic subsides, the segment will certainly be the key pillar to boost India’s economic growth.
(By Rahul Singla, Director, Mapsko Group)