2021 has been a good year for Indian real estate. The year witnessed a great start with a sharp revival in sentiment and a subsequent increase in sales. According to a PropEquity report, housing sales increased by 21% across the top 7 cities in India in Q1 2021 to 1,05,183 units against 87,236 units in Q1 2020. The second wave of coronavirus caught the nation off guard with a sudden spike in fatalities and a temporary lull in business activity. Nevertheless, a remarkable recovery of the sector after the second wave is a testimony to its resilience.
The pandemic has proved to be a learning curve in Indian real estate, both for developers and consumers alike. It has underscored the need for agility and comprehensive contingency plans to navigate uncertainties. Amid extended work from home, the home has emerged as a key pivot around which our daily routine revolves. The pandemic has reaffirmed the need for owning a home, both as an address and investment.
From an investment perspective, the pandemic has heralded a paradigm shift from conspicuous to conscious consumption. People have realised the significance of prudent investment and financial management. Real estate has emerged as a relatively stable asset class amid diminishing lustre in alternative assets such as stocks and mutual funds. India being among the fastest-growing economies of the world has emerged as a preferred destination for NRIs. The trend of reverse migration coupled with uncertainties has prompted NRIs to invest in their homeland.
With the vaccination drive crossing the one billion mark in India, the prospects look bright, and 2022 brings forth new hopes and aspirations. The positive outcomes from COVID-19 will serve as the foundation for real estate growth in 2022. Real estate has witnessed new dawn, with Tier 2 and 3 cities emerging as sunrise destinations. The extended work from home has somewhat blurred geographical boundaries. Additionally, the rapid pace of infrastructural developments and policy thrust has fuelled the real estate growth in these regions. We foresee robust demand from peripheries of metropolitan cities promising a dense green cover and tranquillity.
2020-21 can be regarded as a watershed year, drastically altering homebuyers’ preferences and lifestyles. Today, discerning home buyers are not looking for just a superior product but a complete experience. The work from home has also prompted the need for spacious homes and rethinking of existing configurations to accommodate an additional room as a workplace, a kids’ play area or a box room. Strategic location, best-in-class amenities, developers’ credentials have become key factors for homebuyers.
The preference towards an indulgent lifestyle blended with convenience has provided a fillip to integrated condominiums with stringent 24×7 security and surveillance and well-equipped with necessary facilities. Such condominiums exemplify convenience as they reduce the need to venture out frequently to fulfil basic needs. The prevailing health and wellness concerns imply that residential offerings with robust facility management are gaining currency. All these trends are expected to further strengthen in 2022.
A series of conducive policy reforms such as RERA, GST, etc., over the past few years have infused transparency and accountability into the system. The pandemic has pivoted the focus towards customer-centricity. The real estate industry is headed towards consolidation with organised players to command an edge over their peers. Developers are also realising their responsibility of giving back to society through various initiatives. As a result, sustainability has emerged as a dominant undercurrent with a preference towards residential offerings endowed with green building features and eco-friendly amenities such as rainwater harvesting, wastewater treatment, etc.
Buoyed by strong economic fundamentals and a conducive business climate, 2022 is expected to unlock a plethora of opportunities for Indian real estate to further realign itself in line with global standards and play a pivotal role in India’s development story.
(By Rahul Singla, Director, Mapsko Group)