Trend that will shape real estate in India
The coming days are expected to be more promising for both developers and home buyers. It is expected that the growth in the industry will revive to its erstwhile state, while we put the menace of the pandemic on the back burner. The real estate industry is in a crucial point of rapid transition from witnessing both highs and lows in successive months. The past decade has played an important role in elevating the industry to its pinnacle that we witnessed up until the early months of this year. While the scourge of pandemic has made it plummet to its lowest ebb. Series of structural reforms in the realty sector, especially RERA, has brought in a paradigm shift in the mindset of stakeholders from bureaucrats to developers and customers alike. The realization of much-awaited Policy changes along with the introduction of RERA has substantially helped much-needed industry consolidation and instilling a sense of trust and transparency in the sector. More importantly, the clarion call from our prime minister for “Housing for All” has helped bring the focus on mid-income and affordable house is also construed to be part of structural reform in Indian real estate. The evolution of the industry from brick and mortar to a service-driven one has been stalk and pronouncing. Off late product offerings from the developers has been largely driven by ever-changing customer preferences, technological transformations, and an ever-volatile policy environment. As reported by the Indian Brand Equity Foundation, the realty sector in India is well on its way to reaching a market size of US$ 1 trillion by 2030. And contributes 13% to the country’s GDP by 2025. On an optimistic note, it is expected that the second haft of 2020 and beyond will be favourable for the real estate market. Here are some major trends that would be instrumental in the favourable growth of the sector. Both the residential and commercial sector to grow hand-in-hand. The latter half of 2020 holds great potential for both commercial and residential sectors. As was the trend in the last few years, the office space is expected to gain substantial traction in cities with exposure to the IT/ITeS sector. With rapid urbanization and ever-growing, white-collar migration will keep the growth story intact for both commercial and residential sectors. Concepts like “Housing for All” and “Affordable Housing” is gaining credence for its altruistic nature. This newly found trend will also contribute to keeping the growth story alive. Sub-urban cities to engross more eyeballs. Cities like Pune, Chennai, Hyderabad, and Bangalore have witnessed a steady growth in demand in residential space for quite some time now due to the mushrooming of services driven enterprises. The signs of recovery from subdued growth in recent months due to a pandemic are also perceptible. This sense of optimism is expected to continue for FY21 as well. It is also expected that the demand for affordable housing will pick up in tier 2 cities like Goa, Coimbatore, and alike. Co-living and co-working spaces to hold its ground. Over the years, there has been a significant shift in the buying behaviours of customers, this trend is particularly seen in millennials. They are more affiliated with co-living space as suppose to conventional rented space. The comfort it offers in terms of lean cost and the dynamic environment has caught the attention of students and the newly employed population. On the other hand, the flourishing of the gig economy has created a considerable demand for co-working spaces in metropolitan cities like Bangalore, Hyderabad, and Pune. This trend shows no signs of declining despite the fact that, it had to experience tremendous tough times in the midst of the pandemic. According to Knight Frank, ‘ India has turned out to be the hotspot for co-working space”. In spite of the fact that co-working is a novel concept, there seems to be an ever-growing and widespread acceptance for the same. This trend is responsible for formalizing rental markets in cities like Bengaluru, NCR, and Pune. Technology re-orienting the realty sector. Smart tech and innovation in the sector are no longer an aspiration but a happening reality. Property developers and contractors are fast adopting advanced technology like data analytics, artificial intelligence, and machine learning. This trend of embracing the latest technology is expected to redefine the realty sector substantially. With the adoption of technology, the long-standing issues of project delays and cost overruns are adequately addressed. Smart homes that are fast gaining traction are an offshoot of the rapid espousal of technology in the realty sector. Indian smart home market is currently valued at $893 million and is expected to grow exponentially in the coming years, with the shift in perception over IoT and Home Automation from being perceived as a luxury to comfort enhances the possibility of growth in demand for Smart Homes and IoT. Green living and environmental sustainability With the advent of technology in the real estate has incentivized the developers to procure and use eco-friendly raw materials and bank on environmentally sensitive and sustainable designs. The amalgamation of technology and sustainable living has increased the utility of the one by the other forming a synergy of sorts. Re-defining luxury living The traditional concepts of luxury living, are set to witness a sea change with an increasing shift in preferences from new-age home buyers. To cope up with the changing trend, the developers are eyeing towards offering a holistic and elevated luxury living experience to their consumers. Recent years have witnessed a slew of reforms in the industry. The longstanding reforms were effected with an intention to bring in transparency and a customer-centric approach in the industry. A newly instituted regulatory framework is touted to boost much-needed trust in the industry. But there is a substantial ground left untouched on the policy front, long-awaited reforms with respect to land and labour are still not been attended to, if necessary steps are taken in this direction, it will certainly aid in rekindling lately subdued consumer sentiment. We all hope for better days ahead for Indian real estate. while we recover from the scourge of recently ensued pandemic.