trends that will influence the real estate


Residential was the lone bright spot in an otherwise lacklustre 2020 for the real estate sector. After initially being on the defensive, the sector successfully deflected the covid curveball, displaying extraordinary tenacity and posting record sales in Q3 and Q4 2020, laying the groundwork for a strong comeback in 2021.

The housing market is certainly booming; according to industry sources, about 80% of prospective buyers are interested in purchasing a home within the next year, while 65% choose ready-to-move-in homes in 2021. Home ownership attitude remains high, owing to decision factors such as flexible payment plans, cheap interest rates, discounts, and the enhanced convenience of home purchase due to greater usage of technology.

As homebuyer confidence approaches record highs, the recent budget’s extension of tax benefits for affordable housing and affordable rental housing projects, as well as the RBI’s decision to maintain repo rates, will keep buyer traffic strong, owing to favourable demographics, a shifting geography of housing demand toward lower-density markets, and stamp duty reductions in Mumbai, Karnataka, and Delhi.

trends that will influence the real estate
Emerging trends that will influence the real estate:

Proptech firms will continue to expand and innovate: Proptech has been essential in assisting real estate enterprises in enabling remote business continuity throughout the epidemic. Property owners and developers are increasingly depending on developing digital technology, commonly referred to as proptech, to provide more intelligent and efficient selling, leasing, and property management services. This trend will gain steam in the coming months as more homebuyers migrate to internet real estate platforms. Developers have recognised that their futures are gloomy without the proptech component, but proptech businesses will want to grow and reinvent themselves in order to adapt to all future developments.

The housing demand momentum must be maintained: The stellar performance of the residential sector in Q3 followed by an even stronger performance in Q4, when sales increased by 51% year over year in seven significant cities, are tell-tale signals that this upward trend will continue in 2021. Affordable housing will be critical in raising the bar and laying the groundwork for a thriving housing ecosystem. With the tax exemption, affordable rental housing developments will thrive. Mid-segment and premium residences will see more activity as purchasers seek greater multi-purpose useable rooms.

Consolidation of real estate to accelerate: Demand consolidation toward financially stable developers with a track record of successful projects, execution capabilities, and high-quality projects will accelerate in 2021, and they will continue to capture significant market share, as restricted funding availability, squeezed margins, and shifting consumer preferences toward larger brands will drive smaller competitors out of business. Consolidation will improve sector organisation and focus attention on the premium segment.

Home prices will rise marginally: Despite economic recovery and vaccination roll-out, the odds of property values increasing this year are limited. According to industry statistics, the total unsold inventory in the top eight cities stands at 9.5 lakh units, and reducing it to a sustainable level will take more than a couple of years, despite the fact that sales have overtaken new releases. However, certain pockets may notice a little increase in pricing.

Suburbs and tier-2 property markets to experience rapid growth: Demand for houses in suburbs and tier-2 cities has surged as a result of the desire for a better lifestyle, distant working culture, and reverse migration. Homebuyers are on the lookout for properties priced 30-40% cheaper than those in the urban areas. Additionally, the five-year rental expense for renters in cities is equivalent to 30% to 50% of the property cost in smaller cities. This justification for owning will fuel a housing boom in these satellite communities.

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