In India’s residential real estate market, 2021 was a year of recovery. Home sales and new launches both showed a significant improvement in the period between July and September 2021. The robust momentum in the residential markets is expected to continue throughout the 2022 calendar year, with sales likely to reach pre-COVID levels. The third wave of coronavirus infection, which is difficult to anticipate, could be the only conceivable stumbling block in the recovery process. In addition, 2022 will see the continuation of trends that gained traction during the difficult COVID-19 period.
Evolution of Proptech
One of the great features of 2021 has seen the rapid acceptance of proptech solutions in all aspects of real estate—from construction to sales to customer interaction and asset management— and, this trend will continue in the future. The proptech market has evolved beyond enabling online property search to give end-to-end solutions to consumers before the virus outbreak rocked the global business ecosystem.
Apart from connecting customers with the best real estate deals, new-age real estate platforms now provide various services such as virtual / 3D tours, virtual site visits, apartment management, digital payment integration, movers & packers, online rent agreements, and so on.
Maximizing the use of cutting-edge technologies in the real estate business has marked a turning point. Digital launches, 3D property viewing, augmented and virtual reality-based design projects, and virtual property exhibits have all begun to break free from the confines of boardroom meetings and are now being used in the real world; this paints a positive picture for the sector as a whole, as well as giving NRI buyers a significant boost.
Moving up in life
Following COVID-19, the concept of property ownership has gained much traction. Although this has helped form positive consumer sentiment toward residential real estate, the government and the banking sector support has gotten things started. As a result of the combination of these two factors, demand and supply metrics improved in the July-September quarter of 2021.
The year 2022 has been slated to give the sector the much-needed boost for which it has waited and worked so hard. States can help speed up the recovery process by introducing new homebuyer incentives or extending or initiating stamp duty and circle rate waivers.
People want to live, exercise, and enjoy life in new ways now that Covid has been contained. Due to these deciding variables, consumer perceptions are changing, resulting in a surge in demand for larger and better homes.
Furthermore, as per the recent consumer sentiment survey by our group company Housing.com, with corporates adopting work-from-home and hybrid work policies, homebuyers are expressing interest in looking for larger homes. Also, homebuyers are now taking into account nearby healthcare infrastructure for selecting a property. Recreational spaces and daycare centers have also made it to the list of top amenities that buyers look for.
According to a report by PropTiger.com, another group company of REA India, new launches in Rs 75-100 lakh category was between 7-9% in the first three quarters of 2019, which was now between 11-13% in the first three quarters of 2021; the sale was 9% in the first three quarters of 2019, which was 10-11% in first three quarters of 2021. On the other hand, sales and launches in other segments have been consistent since 2019.
Increased NRI penetration
NRIs, particularly those from the Gulf and the United States, are seen as high-potential clients in the real estate sector. NRIs are opting for larger, more luxurious residences due to the lifestyle they enjoy in the country they are staying in. Developer offers and the postponement of the RERA deadline as part of the Atmanirbhar Bharat package have motivated NRIs to buy property in India.
Now, a significantly bigger percentage of NRIs is looking for residences for personal use rather than investment, which is a trend reversal from the past. With more NRI property buyers planning to return to India, luxury residences would see more demand. NRIs are concerned about their health following the pandemic, and projects that address this issue will benefit the most. NRIs are inquiring about the extra features in the property, and we’re getting a lot of such enquiries.
Since consumer outlook has much to do with how a sector performs, India’s housing market is poised for robust growth in 2022, based on positive sentiment drivers. This positive sentiment has become evident from demand and supply indicators showing consistently improved in the past 12 months despite the many challenges the sector faced.
However, our expectations of the sector seeing better days in the new year are based on the hope that the banking sector would continue to offer home loans at existing prices, the government would extend the deadlines of many housing-related subsidies that are ending in March 2022, and continued & concerted efforts from the builder community to make home purchases convenient as well affordable for the end user.
(Authored by Amit Masaldan, Business Head at Housing.com)