The Indian real estate developers have to make the most of these unprecedented times and embrace digital solutions and technology to chart the way forward.
CREDAI fears job losses as well as delays and defaults in delivering the projects to homebuyers if the government does not come to the rescue.
The real estate sector was on a growth trajectory since the last few years and was likely to emerge stronger than before. However, the coronavirus lockdown put brakes on its growth momentum. Industry estimates of the Indian real estate market, prior to the COVID-19 outbreak, was projected to be $650 billion by 2025 and $1,000 billion by 2030. This, however, seems tough amidst the current circumstances, according to a recent study by FICCI and ANAROCK.
“The developers are cognizant of this changing market condition and have effectively controlled launches to not create an oversupply situation. This adaptability and agility to respond as per the market conditions will go a long way for the sector’s growth and stronger emergence in the years to come,” says Getamber Anand, Co-Chair, FICCI Real Estate Committee, and Chairman & Managing Director, ATS Infrastructure Ltd.
Moreover, “COVID-19 has surely altered homebuyers’ preferences and their housing requirements due to which we are likely to witness trends such as demand for larger and functional homes, townships, plotted developments, weekend homes, and farmhouses. Also, one has to remember that the market is now driven by end-users only and so product offerings must be appropriately planned. When nothing is sure, everything is possible and so the Indian real estate developers have to make the most of these unprecedented times and embrace digital solutions and technology to chart the way forward,” suggests Anuj Puri, Chairman, ANAROCK Group.
Keeping all these things in view, here are some success mantras for real estate developers to thrive and flourish in the current market situation:
EMBRACE DIGITAL Digital is the new normal in the world that has undergone a sea change due to the pandemic. Real estate developers have to be prepared for this sooner than later. Homebuyers are finding it convenient to do virtual site visits and discussions and come in close contact with the real estate developers only during the final stages.
A quick look at searches on the real estate portals indicates that while the monthly visits (traffic) dropped immediately post lockdown imposed in March 2020, the revival has been phenomenal. Between April 2020 and August 2020, various real estate portals have witnessed an uptick in traffic in the range of 23% to 104%, depending on the size and scale of listings. Digital is surely the way forward.
VIRTUAL IS THE NEW ACTUAL As per estimates, out of 10 virtual site visits done for prospecting, homebuyers are now physically visiting only the top 3 shortlisted projects. So make yourself future-ready to have a top-class cutting-edge technology-driven virtual site visit so that your projects are shortlisted in one go.
FOCUS ON BUSINESS CONTINUITY PLAN (BCP) These are tough times and nobody has a definite answer on when things will be back to normal. Hence, having thought through BCP is the key to manage project execution and adhere to the timelines. Real estate developers who manage to deliver in these times as well will have high credibility with homebuyers. Also, despite the situation, it is important to keep the construction ticking and so the developers should consider options of constructing away from the project site, remote progress monitoring, etc. so that future intermittent lockdowns do not hamper the project progress.
KNOW YOUR CUSTOMERS (KYC) In the present times, home-buying is dominated by young people aged between 30 and 35 years. These homebuyers are well-travelled and aware of product offerings across the world. They are also highly tech-savvy and so this segment must be appropriately tapped through digital means and also catered by offering houses that match their tastes and requirements.
FOCUS ON THE SALARIED CLASS LOOKING FOR END-USE Currently, salaried class individuals with fixed income and having a clear vision of their continued employability are mostly taking decisions of purchasing a home, primarily for the end-use. Nearly 80% of the demand is emanating from this segment and developers should not miss tapping them at any cost.
DON’T MISS THE NRIs Depreciating rupee and homecoming have made property purchases extremely lucrative for the NRIs. Moreover, digital has always been the preferred and utilized mode of purchase for NRIs and it augurs well in the current times.
PRIORITIZE SELLING THAT CAN BE SEEN Ready-to-move-in is the flavour of the season. Today, home buyers are looking to buy apartments that they can touch and feel, look at the views, and immediately move in. Not to forget, there’s no execution risk in the ready-to-move-in apartments and it attracts zero GST as well.
DO YOUR HOMEWORK WELL Today’s homebuyers are informed and well-read. With so much literature available on the current market developments, the developers need to invest time and effort in background work and developing an appropriate product that suits the homebuyers’ requirements. So it is prudent to invest in research and advisory before commencing any new project.
FOCUS ON AFFORDABLE-TO-MID-SEGMENT Affordable-to-mid-segment housing will continue to remain in demand as homebuyers having an appetite for new property purchases will look to rationalize their quantum of investments. Nearly 70% – 75% supply has been in this segment across the top 7 cities of India and that is where the demand lies as well.