The real estate industry is one of the most well-known on a global scale. It comprises four sub sectors, that is, housing, retail, hospitality and commercial. The expansion of this sector is well supported by the expansion of the corporate environment and the demand for office space, as well as urban and semi-urban housing. In India, the real estate sector is the second highest employment generator, after the agricultural sector. The real estate sector in India has witnessed a great surge post pandemic including high interests from NRIs. Bangalore is expected to be the most favored property investment destination for NRIs followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
Post pandemic scenario
The Indian real estate market is expected to exhibit a CAGR of 9.60% during 2022-2027. The impact of the Covid-19 pandemic on real estate has been unprecedented. According to the industry assessment, the pandemic caused a significant crunch for real estate developers. 2022 has proven to be a more stable year for the pandemic affected business as well the residential sectors. The trend in residential sales is projected to continue in 2023 as potential homebuyer’s demand for larger houses, greater facilities and competitive pricing will keep them interested in closing transactions.
Some of the major conclusions to be highlighted in the real estate sector in 2022 is the incremental demand for office space among the top IT businesses that will add to the warehouse industry which is expected to rise owing to the e-commerce boom and rents are likely to increase even in 2023 as the world is getting back to working from office.
Tier 2 cities become popular
The COVID-19 pandemic has fueled migration from major cities to the suburbs. While pre-pandemic saw an opposite trend, a lot of factors like the consistent lockdowns, work from home culture in the corporate sector, remote working, etc has paved way for he tier 2 cities like Mysore, Coimbatore, Nagpur, Hubli, Belgaum, Panjim, Ahmedabad, and many more cities to welcome the surge in real estate. This in turn has improved the the prices of properties and thus also improved the cost of living, by giving a feeling of stying closer to the metro cities.
Tech inclusion
Essential trends that influence India’s real estate sector have been added on at a fast pace. Firstly, digital house hunting. This trend has been welcomed by NRI investors and people who cannot frequently go for site visits. Real-time video screening to homebuyers and showing 3D models has made things convenient for buyers and developers. We will also witness more and more tech penetration in the real estate services and roles as tech makes everything much more smooth in functioning.
To emphasize the use of technology in this sector has been a never ending discussion. It is necessary in automating sales and marketing . For example, Customer Relationship Management (CRM) software has simplified the management of leads and clients for real estate firms and developers. Furthermore, buyers can now receive timely updates on the project’s status. These real estate trends in India are influencing the real estate market by transcending a change in how things work. With improved technology and innovation, the entire market dynamics have shifted, propelling productivity and transparency in the real estate sector to new heights.
Nuclear family housing demand
Buyer demand for single-family homes is rising as a result of people moving from cities to the suburbs. There are various factors driving this tendency, like:
- low rates of interest
- The importance of the home is increasing as a result of isolation, social isolation, and telework
- robust housing patterns before the epidemic
Another parallel development is the entry of millennials into the home ownership phase of their lives, has to the demand for homes brought on by the pandemic.
Suburban development is also being fueled by millennials who want to start a family or buy their first home. This trend will continue to improve in 2023.
2023 is going to be challenging on a positive note but with an eye on the emerging trends, a flexible attitude and a willingness to adapt, real estate industry will reach greater heights.
(The author is Mr. Navin Dhanuka, MD & CEO, ArisUnitern RE Solutions and the views expressed in this article are his own)
