Real estate sector in India may scale new heights in 2022

The resilience of the realty sector from the last two waves of the pandemic makes one hopeful that the sector will tide over the latest Omicron variant threatening the world now.

Owing to the significant contribution to the Indian economy, the real estate sector will emerge as a strong pillar in the years ahead to support India’s dream of becoming a $5 trillion economy.

The real estate sector emerged as the most desired investment choice in 2021. Owing to the two waves of the COVID-19 pandemic and the consequent lockdowns, ‘Owning a Home’ became the buzzword in every conversation – in family, social, and professional circles. Despite being a challenging year in which lives and livelihood were at stake, economic growth tumbled and job losses were rampant across sectors, the real estate sector witnessed a strong rebound thereby making positive headway for the coming year. The resilience of the sector from the last two waves of the pandemic makes one hopeful that the sector will tide over the latest Omicron variant threatening the world now.
 
The real estate sector, on its part, has been agile to the changes creeping in. Ably aided by technology, it revamped its approach and aligned its visions and operations with evolving trends and customer preferences. The pandemic setbacks couldn’t deter the spirit of the sector for very long and the promising recovery was witnessed through the improved market and consumer sentiments.
 
On the back of propelling business environment, the real estate sector expanded its ambit from metropolises to explore the underlying opportunities in non-metros and emerging locations. Large-scale infrastructure boost, low tax rates, latest trends, and policy push from the government helped in driving the next wave of realty growth in the country. The pandemic-infused trends coupled with low-interest rates, affordability, and other favorable factors harnessed the positive sentiments in these markets. Besides, the state capital and metro cities, tier 2 & 3 cities emerged as strong growth drivers of the real estate sector.
 
Tier 2 cities like Lucknow, Amritsar, New Chandigarh, Faridabad, Indore, Ahmedabad, and others witnessed the increased traction from property buyers and emerged as promising property locations. Owing to the infra developments, well-planned connectivity, livability, and world-class social infrastructure, tier 2 & 3 cities are attracting more and more potential buyers. Undoubtedly, these markets will continue to lead the sector’s growth in the coming year and beyond. The emotional sentiment of homebuyers of owning a home in their hometown also propelled these cities into prominence. Also, the intra-city movement of families into organized group housing complexes was a big driver of home sales in these cities. Bigger residential spaces and plenty of open and green spaces were the hallmarks of development in these cities.
 
The home buying sentiments were also quite pronounced in the top eight cities. According to an industry report, the July-September quarter witnessed a 92 percent hike in home sales. The report also highlighted that the July – September period witnessed a surge of 21 percent in the new home launches. The increased numbers indicate the regained consumer and investor confidence and are encouraging enough for the market to maintain the growth momentum in the year ahead.
 
The retail sector, which was hurt by the pandemic, soon adapted to the new trends due to evolved consumer aspiration and preference. It saw new asset classes like hi-street and multipurpose commercial properties finding favor with investors and consumers. The focus has pivoted towards hi-tech, modern, organized, and safe shopping experiences. The rising number of well-known brands and conscious consumers are catapulting the demand for upscale shopping complexes & malls, entertainment hubs, and high-streets across the country. To perfectly catch the trends and ever-evolving preferences infused by the pandemic, the Hi streets have emerged as the strongest contributor in the growth of the commercial segment. Developers are strengthening their portfolios as more and more investors and retailers are hugely investing in this commercial asset class. 
 
Today, the Indian market stands as one of the favorite markets of various global brands. They are eyeing the Indian market with aggressive business expansion plans. Besides, transforming lifestyle, elevating urbanization, and allowing 100 percent FDI in retail are the key factors leading to the success of hi-street concepts in India apart from malls and shopping centers. These spaces yield better rental returns and retailers are actively investing in the segment. The mixed-use development of urban India like modern multi-level car parking with multiple benefits is likely to facelift the infra landscapes in the cities. The segment is another emerging asset class likely to be in the center stage in the coming year. 
 
Owing to the significant contribution to the Indian economy, the real estate sector will emerge as a strong pillar in the years ahead to support India’s dream of becoming a $5 trillion economy. Huge investment through Public-Private Partnership (PPP) in infrastructure will certainly help the country double its economic potential. If the positive sentiments continue to soar in the coming period, the sector will become the next big thing in India’s economic growth. 

(By Mohit Goel, MD, Omaxe Ltd)

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