The current year 2020 has been very challenging for real estate because of the worldwide impact of the Covid-19 pandemic and the resultant lockdown. However, with homebuyers and investors returning to the market in recent months and some new trends emerging, 2021 certainly looks promising for the sector.
According to industry experts, the main theme of 2020 has been about being accommodative, collaborative and understanding, not just in real estate but across sectors and industries. Despite the unusual pressures on the housing market, residential real estate is on a high this festive season.
“As anticipated, the ongoing festive quarter (October-December period) is seeing robust housing sales across the top cities. This is largely due to multiple offers and discounts being doled out by developers all across and limited-period stamp duty cuts in states such as Maharashtra. These discounts and offers collectively give buyers overall financial benefit between 5% and 15% of the property cost, depending on project, amenities, etc. Additionally, lower home loan interest rates are also attracting buyers,” says Anuj Puri, Chairman, ANAROCK Property Consultants.
Latest data trends also signal positive trends. ANAROCK Property Consultants, for instance, sold 1,805 homes across top 9 Indian cities (NCR, MMR, Chennai, Kolkata, Bangalore, Pune, Hyderabad, Ahmedabad and Lucknow) and Dubai in the months of September and October this year. Last year, the firm sold 1,016 units in the corresponding period.
“This pent-up demand to own homes has been further accelerated by pandemic-like exigencies coupled with the ongoing favourable period amidst these schemes and offers. What we are seeing right now is organic demand driven by the desire to own homes. If and when the various discounts and offers are rolled back, demand remains even though sales velocity may decrease. If there was no demand, these deal sweeteners wouldn’t have been effective,” informs Puri.
Also, developers will obviously continue to fuel demand with offers and schemes even beyond the festive season in 2021. Likewise, home loan interest rates will not harden anytime soon as it is quite clear that increasing interest rates would impact overall demand at a time when the government is keen to boost consumption. Therefore, ANAROCK expects housing demand to continue going forward as home ownership has gained top priority for even the new-age millennials who previously shied away from it.
New Trends
More than anything, consumer preferences have altered post the pandemic in order to accommodate new market realities. New trends are also seen to be emerging, some of which are:
# With work-from-home a viable option today, many future homebuyers may shift to the peripheral areas for bigger homes and a better lifestyle – at more affordable prices. Thus, the previous ‘gold standard’ of Indian housing – the walk-to-work / short drive to work, by definition only in and around central corporate workplace hubs – may thus shed much of its popularity for several prospective homebuyers.
# Further, many prospective homebuyers are preferring to now shift to self-sustained gated communities where their entire family’s needs are sufficiently met. Mostly, these self-sustainable housing societies offer companionship, safe and secure environment, while providing amenities that reduce the need to venture out.
# Notably, top cities like Bengaluru, Hyderabad, Chennai, Pune and Gurugram are seeing high demand for plots in the wake of the new realities presented by COVID-19. “Many are now looking to buy land as a long-term investment. Alternately, a few are even mulling to buy plots in gated societies and build and live in them. Such self-owned homes provide better social distancing in comparison to apartments as well as give the option of living in greener and open spaces,” says Puri.
Outlook for 2021: Developers’ Take
Developers say with the Unlock phase, the real estate sector has witnessed a pick up in terms of sales and demand, which is expected to further grow in 2021.
“The COVID-19 pandemic has led to a trend of reverse migration to Tier-II cities. The demand for the realty sector in these regions is expected to see a fillip in the coming year as it gives advantages in terms of low-cost unit area of real estate properties. The sector has also seen prolonged stress in 2020, one of which is the tale of stalled projects. The ultimate change, however, could only be brought by the consolidated efforts of the industry players,” says Ashish Sarin, CEO, AlphaCorp.
Moreover, “Housing for All by 2022 and PMAY have pushed the supply of affordable housing units, which again be a key growth driver for real estate in 2021. Investment in the infrastructure, industrial and institutional sector will create better job prospects in key markets and simultaneously push the demand for residential units. Micro markets will attract a large number of buyers due to supply of units, budget and quality work. Projects having environment-friendly features and green living will witness demand from new age home buyers. It is expected that more end users will like to have their own home rather than living in rented accommodations post Covid-19,” says Suresh Garg, CMD, Nirala World.
Subodh Goel, Secretary-CREDAI Western UP and CMD, Civitech Group, says, “The sale of residential units and absorption of commercial spaces has shown a steady rise in the last 2-3 months. We are expecting this trend to continue in the next fiscal 2021-22. Big infra projects and urban development around highways will create new realty avenues and more employment that will translate into higher demand for residential units and commercial spaces. Buying a home will be the top priority for millennials after Covid-19. Affordable housing will be more in demand due to low interest rates and other benefits. I feel the luxury segment will also see a major shift towards offering facilities for work from home as an emerging culture.”
(Source: Financial Express)
