As we march in 2022 with a pandemic-riddled economy, the retail industry has adapted to the change and is set to enable recovery with a new phase of growth, innovation and technological trends. Although the common word circulating in social circles is that the pandemic has hit the economy hard, but the realty prices across cities have risen 30-100% across different categories.
The recent and unusual combination of positive housing demand shocks, negative housing-supply shocks and the pandemic led realization of the importance of home security, passive income sources and the importance of space has led to a spark in the realty market in every category.
With the adaptation of work from home culture and location and distance from work no longer a restriction, the aspirations of consumers are changing. With more time being spent at home, people who are staying in an apartment, aspire to live in a villa. People who stay in a villa, want a bigger space like a farmhouse.
People also have realized the importance of liquidity and want to own assets which reap return.
With the rise in both commercial and residential demand, the demand for lands with clear titles have also risen to cater to these demands.
Throughout these turbulent times, the world has learned a lot about coping, mitigating, and quickly recovering from an impending crisis. And the Real estate being a multi-faceted industry, has resonated the same sentiments.
Thus, it becomes important to keep in view some of the key trends in the real estate industry that we foresee in the coming years.
More Property Tech Innovations
The property and real estate industry is still a relatively traditional industry that has been slow to adopt modern technologies. But this is changing as the industry is undergoing a significant digital transformation. Several modern techniques and solutions are being incorporated across the sector. Such new advancements have accelerated the market’s growth trajectory. PropTech startups and scaleups are leveraging emerging technologies to enable fractional selling in turn enabling every category of investors to participate in ownership of GRADE A assets which promise a regular return on investment on capital in addition to long term appreciation. Ten years back it was not possible for someone with a small capital to invest in GRADE A assets, today it is.
GRADE A assets appreciate consistently and steadily, get rented easily and offer security and reasonable return to investors over a long term.
Sustainable and Environment-friendly Residential Developments
Environment, sustainability, and governance are expected to be a path to progress in the real estate industry. With the change in climate and increasing congestion in cities because of the increasing density, developers are now laying strong emphasis on self sustainable communities and per capita space requirements.
India is still a tradition driven country where families focus on security of the family’s present and future. With the environment of uncertainty caused due to the pandemic, the young india wants to ensure they build a permanent roof over their family’s head and that’s a major reason for the housing category, especially the affordable segment, to witness the boom that has happened.
With more time being spent at home, the quality of construction and well planned housing units that cater to the personal and professional needs of the families will play an important role in shaping the growth trajectory of any developer and will become an essential need of the sector.
Buy land, they’re not making it anymore.
This segment has seen a huge appreciation in the last 24 months. Be it residential use, commercial use or agriculture use, the segment has achieved 50-150% growth in the last 24 months across the country in most urban and semi-rural regions and 20%-40% in rural regions.
Land is the raw material for any development and it’s limited in supply. With the rise in commercial, residential and recreational demand, the demand for land has increased multifold to cater to the current demand and to create a reserve for the future.
This segment is going to see a strong demand and great upside in the year ahead. It is advisable for investors to make land a part of their portfolio as it is estimated to out run all other categories due to its limited availability.
Expectations from the government
The real estate industry has always been a dominant player and has contributed greatly to the country’s economic prosperity. In the coming months, the expectations of the buyers and developers ought to rise as the sector has been the recipient of a lot of newly formulated government policies.
Industry sources feel that policies like single window clearances for projects, subsidized duties and lower loan rates will further boost the market in terms of demand.
The current industry trends indicate that the future of Indian real estate not only looks bright but is set to do better in the coming years. There are several dynamics that will continue to impact the multiple touchpoints of the real estate industry, such as prices, buyer behavior, demographic shift, cost of raw materials in general.
Hence, affordable, self-sustaining and lifestyle properties with a consumer experience-centric approach will lead the way for the industry in the coming year. Also i believe, Land as a sub-segment will be a front runner due its unique nature and heavy asset value.
By – Ayan Nagpal, Director, Agrocorp Landbase