India’s burgeoning real estate sector registered indomitable resilience against the Covid shock which hit the segment last year. Despite early setbacks, the sector adjusted quickly to the new normal with digital methods and was back on recovery track soon. Demonstrating promising growth, huge sales were registered in Q3 and Q4 2020 which continued till April 2021.
The second wave of Covid spread has surely disrupted the steady upward growth trajectory and partial lockdowns and movement restrictions are bound to show a ripple effect. However, the real estate segment this time is well-prepared with tried and tested methods due to which the pause will be temporary. Mass inoculation drives and improvement in recovery rate are also boosting confidence in market sentiments.
A silver lining appeared when revival signs were recorded in early 2021. According to Knight Frank, sales of residential properties across eight major cities grew 44 per cent in the January-March period this year to nearly 72,000 units as demand recovered. Trends also show that 80% of prospective buyers are looking to acquire a house within the next one year, while 65% of the buyers prefer ready-to-move-in houses in 2021. Low-interest rates, conducive government policies, flexible payment plans, easy investment opportunities and use of technologies have played a vital role in driving this growth.
New trends are constantly shaping up in these evolving scenarios. The extended work from home culture is likely to stay and people will continue to demand more spacious homes. Tier-2 and tier-3 cities will record a surge in demand as people will look forward to buy properties in their hometowns. High rise apartments, gated townships and luxury towers with well-managed infrastructure will continue to dominate the ultra-luxe segment driven by NRIs, UHNIs, expats, business leaders, among others. The interest rates are at an all-time low and the RBI’s rate cuts have boosted demand. This trend has enabled buyers to go ahead with their purchase decisions. The real estate sector has always been an investor’s favourite and a buyer’s market. With guaranteed higher and secured returns, the sector has attracted investors and the trend is likely to continue throughout 2021.
Ready to move in spaces will be in demand as buyers want to avoid waiting for their properties. These properties eliminate market risks and are secure choices. The under-construction properties take time and in a fast-moving world where buyers’ preferences are changing rapidly, ready to move in spaces have become an attractive offer for them. Digitisation will play a pivotal role in the sector’s growth in the market. Property dealers and buyers have adopted digital methods to communicate, research and buy. Negotiations, searches, inquiries are happening online.
These trends are likely to evolve and continue in the days ahead for a digital future. Trusted developers with strong financial backing and proven track record will gain a higher market share. People will look for developers who can sate their demands by matching emerging trends with their preferences with use of technology. Customer-centricity will become the norm and eventually lead to better customer satisfaction.
A rise in property price is also expected with economic recovery and vaccine roll-out. Foreign investment will continue to be buoyant as there has been good demand from foreign investors for quality assets in India, thus showcasing the confidence in the sector. With ease in investment opportunities, REITs will continue to be the key theme and gain traction in the market in the coming period. So far, the resilience of the Indian real estate during the pandemic has increased its value leading to more attention from stakeholders involved. As soon as the pandemic subsides, the segment will definitely be the key pillar to strengthen India’s economic growth.
(By Rahul Singla, Director, Mapsko Group)