Real estate is the country’s second-largest source of employment, accounting for around 13% of the national GDP. While the industry had numerous challenges in the past 24 months, Indian real estate eventually emerged as one of the most significant drivers of economic growth. With people realizing the importance of owning their dream home, we are only expecting a consistent increase in demand as customers aim to invest their pent-up savings either in luxury or affordable homes.
Even after an unexpected increase in the repo rate from the RBI, the real estate market is not showing any signs of slowing down. In fact, expecting a further increase in interest rates in the near future, customers are showcasing some great intent to book their homes at the current affordable levels. Developers are also working hard to sustain the current price levels, making it more convenient for the customers. Not only that but to entice potential purchasers real estate companies are providing homebuyers with competitive prices and flexible payment arrangements.
With the market dynamics changing rapidly, here are some of the key factors that would redefine the real estate landscape in the future:
Web 3.0: The integration of blockchain technology with the real-estate sector could bring a lot of benefits to the industry, including increased trust, enhanced loyalty, proficient data management, and access to real-time information. The technology can certainly help the industry eliminate long-drawn processes like property registrations, creating contracts, etc. thereby creating a sense of transparency and efficiency. Additionally, Metaverse continues to evolve as an ecosystem & at a fairly nascent stage in India. It combines technologies such as augmented reality, virtual reality, and video to create a digital space where users can interact, play and communicate virtually just like they do in the real world.
Serviced Apartments: While fully-serviced apartments have been around for a long time, there has been a resurgence in demand since the pandemic. With a significant increase in the industry, the demand for serviced apartments has skyrocketed. These are completely furnished residential suites with housekeeping, security, and maintenance services. These furnished flats are most popular in metro and tier-I cities with a large IT population. Perfect for corporates and large businesses, the rental demand for serviced apartments has increased especially as some employers are actively pushing the hybrid working model.
Green Homes: With customers becoming more and more sensitive about our environment, the demand for Eco-friendly homes with environmental certifications would see a multifold increase. They are currently priced on the higher side as compared to traditional homes. Greenhouses not only provide better living spaces but also help builders explore untouched territories to meet the demands.
Hybrid Spaces: India is the 3rd largest startup ecosystem in the world with a solid base of tech talent across metros like Mumbai, Delhi, Bangalore, Chennai, Pune, and Hyderabad. Hybrid spaces and coworking spaces provide an ideal platform for these startups to work in a hybrid model, thereby aiding them in cost savings. As this tendency spreads to tier-II cities, it produces an upward trend in productivity and cost-efficiency while also making fresh inroads into the market.
Customers preferring luxury residences: Since 2020, discerning buyers have preferred to invest in luxury residences rather than other asset classes or high-end commodities. Moreover, a majority of high net-worth individuals (HNIs) in India are looking to buy luxurious residential properties in the next 2-3 years. Since the markets have opened up and India is witnessing a V-shaped recovery, customers would now be looking at an “upgraded lifestyle” and hence are opting to buy luxurious homes.
As the global economy improves, big investment banks and private equity firms like JP Morgan and Blackstone have been equally bullish on India’s residential and commercial markets. Blackstone especially has built a strong portfolio of over 38 million sq. ft. of commercial real estate across 7 cities, making it one of India’s biggest landlords. Adding to the boom in residential and commercial real estate, even the organized real estate space has picked up the pace and will continue to do so. With markets completely opening up, demand for important spaces like Corporate parks, IT Hubs, Malls, etc. has also reached pre-2020 levels. As the world comes back to normalcy, I believe, the organized real estate business would also prove to be a vital contributor to the Indian economy.