The impact of the two waves of the pandemic has confined people’s lives to their homes. And, it has been successful in affecting every sphere of life – the real estate market is no exception. Remarkably, the residential real estate market is adapting to the new demands as it is going through a roller coaster ride.
There have been enough twists and turns, and the real estate market is about to witness more. With the outshining returns, this industry still remains a personal favourite for investors.
What do the numbers predict?
Looking at the year-on-year graph, the home sale spiked to about 71%, and in 2021 alone, 237000 units were sold. The statistics can be looked upon as a ray of hope.
Based on the data from Anarock Property Consultants, 76400 units were sold in Mumbai Metropolitan Region (MMR), and 40050 units were sold in the National Capital Region. Thus, it can be presumed that 2022 will bring in a new advancement in the profit margins of the real estate sector.
The real estate market is adopting the changes
The Real Estate market has witnessed two new trends – urban shuffle and urban exodus. With the spread of the pandemic, the work culture commenced to encourage remote working, and people got the freedom to work from anywhere.
Everyone had to accept the new normal, and as a family began to spend more time together, there was a desirable need for more space. Thus, people began to look for bigger homes and hygienic lifestyles. But, it was perceived at a plodding pace.
Demand for villas, second homes and farmhouses spiked. What was the reason? Maintaining social distance and getting rid of the mundane daily routine created the necessity.
But, with the situation getting normalised, employees are asked to return to work in the office. So, the amount of space that was needed previously reduced, pushing the living in luxury idea back towards the urban. Now, the tables turned towards the commercial segments, which bounced back in business. Parallelly, there was an upsurge in the housing segments.
What is the talk of the market?
Niranjan Hiranandani, managing director, Hiranandani Group, mentioned that there had been an acceleration in the trends that support suburban growth and digitisation due to the pandemic.
In 2019, the resales fell short by 10%, but by the last quarter of the year, the country’s top eight residential markets achieved a new ecstasy of 90,860 units. In 2020, 99,416 homes were sold in India between January and June, about a 27% rise in sales during the second wave. Compared to 2019, a 2% reduction was witnessed by the end of 2021 in inventory. But, average residential property prices increased by 3-5%.
2021 is being labelled as the “year of resiliency”. Revved vaccination drive, a vibrant capital market, reduction in home loan interest, liquidity infusion, and market consolidation were the primary sources of fuel to ignite residential property sales. And, 2022 is looked upon as a game-changing year.
Repercussions due to a new variant
With the spread of the Omicron variant, there is again a decline in the site visits, based on the restrictions imposed by the government. But, a decisive vibration can be felt through digital inquiries as reported by the property brokers. There are no acute restraints on the construction work, but the future home buyers have to decide.
What matters “Now”?
Based on the GDP report of India, the real estate sector is one of the prime contributors. And, the real estate industry needs to maintain stable communication and bridge the gap through digital adoptions. Implementation of augmented reality (AR), virtual reality (VR), 3D tour programmes, and artificial intelligence (AI) have to play a critical role.
The demand for residential estates in the top cities, such as Mumbai, Bangalore, Kolkata, is now diffusing into India’s Tier II and Tier III cities. And, the report prepared by the India Brand Equity Foundation (IBEF) expects the real estate market to reach $1 trillion by 2030. So, we need to keep our hopes high.