The real estate sector registered a phenomenal performance in 2021—a year that was marred by the pandemic. The rising awareness on health, sustainability, future security and stable investments led to a surge in housing demand. The residential sector was quick to adopt technology solutions to sustain business operations and was better prepared this time to stand the pandemic shocks.
The consumer confidence and market sentiments were strengthened by supportive government policies, customer-friendly low tax regimes, low interest rates for loans, stable investments, digitalization and most prominently, the acknowledgment of real estate assets among buyers as a guarantee of a secured future. Today, residential real estate has transformed itself into a buyer-centric market and a bright future awaits the sector in 2022.
Looking at the overall performance of the housing market, it outperformed all to become the most rewarding investment choice among investors. Reflecting an uphill climb between Jan – Sep 2021, 1.63 lakh units of new residential supply were added across the top 7 Indian cities – 27% higher than 2020, as per a report by Anarock. More than 1.45 lakh units were sold – 5% higher than in the whole of 2020. The residential real estate sector recorded a swift comeback after the 2nd wave and showed a sharp V-shaped recovery.
The pandemic resulted in many new trends taking shape in the residential sector that encouraged real estate developers to cater to the new preferences of the buyers. Tier-II, III cities emerged as the absolute winners and attracted potential buyers owing to trends like work from home, e-schooling, reverse migration and the desire of a home with large spaces amidst lush greenery. Also, flexible work policies have encouraged them to look for residential offerings in their hometowns. Affordability, world-class infrastructure, excellent connectivity, fewer traffic bottlenecks, low pollution levels, affordability and better quality of life are the factors that boosted housing demand in emerging locations.
The home buying preferences of the buyers have changed drastically and they are now enquiring for bigger sized units with customizations that come with large open spaces, additional rooms, modern amenities, dedicated office spaces, study room, fitness and entertainment zones, balcony, and other facilities for an indulgent living. The buyers now look for modern homes offered by trusted developers in localities with well-developed social infrastructures like shopping centers, schools, hospitals, and banks, cinema halls, restaurants and others.
As per industry reports, the residential real estate market can see up to a 5% rise in values next year. JLL further predicts that institutional investments into Indian real estate are expected to rebound in 2022 led by low-interest environment, continued monetary stimulus, improving revenue visibility across asset classes, and inclusive growth policy and in 2022, it is expected to cross the $5 billion mark, which was witnessed by the Indian real estate annually during the 2017-2020 period. India is headed to become a 5 trillion-dollar economy soon and the real estate sector will definitely become the biggest contributor to transforming this dream into a reality.
(By Santosh Agarwal, CFO and Executive Director, Alpha Corp)