While the world is still reeling from the aftereffects of the pandemic and countries like India continue to witness a surge in the number of cases, the strategy for the future keeps changing. It is now being observed that while the lockdown helped in making us more prepared for the virus, it affected our economy adversely, impacting both demand and supply parameters for most businesses. According to the Knight Frank-FICCI-NAREDCO Sentiment Index conducted for the period Q2 2020 (April – June) the Current Sentiment score has been the lowest. Moreover, while the Future Sentiment index appears subdued, it shows an improvement over the previous quarter and even in these choppy times, the sentiments of the industry stakeholders for the next six months are showing an improvement in Q2 2020.
In this backdrop, as the country gradually moves towards a resumption of economic activities and tries its hands at a semblance of normalcy, the sentiments for the real estate sector, especially for residential real estate are expected to be sombre. However, the situation will not be the same forever and the market dynamics will evolve and change, as new trends will emerge. Here, we have made a list of a few important trends in the residential real estate industry.
Importance of Home Ownership: If there was something that this pandemic taught us (apart from terms like physical distancing and pandemic-proofing) it’s the fact that physical assets provide the highest sense of security and especially more so in times of a crisis. Therefore, it is being stated that in future, the trend of investing in tangible assets will rise as people are understanding the importance of having a home and investing in real estate. In these uncertain times, where a home was the only safe place, people who preferred rental accommodations will now explore home buying options and would benefit from a favourable market and cheaper home loans available.
Millennials are the new market: At a time when the stock markets crashed and the bank interest rates went down and every sector was incurring losses, the thought process of millennials about investments underwent a change. And what better than a physical asset in the form of one’s own home, which makes millennials, who were earlier averse to making long-term investments in the form of a house, a new market for real estate developers.
RTM homes in demand: It has been observed that instead of opting from amidst the many subvention schemes selling under construction properties, buyers now prefer ready to move houses. and in light of the pandemic and the past experience with under construction properties, buyers will now prefer ready-to-move-in homes while the rest will focus on projects that are in advanced stages of construction with six months or less to completion. Another interesting observation is that people are now looking at branded developers who are expected to benefit from the market consolidation and also, owing to their goodwill and large corpus are more likely to complete projects on time.
Location preferences will change: Remember how long you would travel in the metro or in office cabs to commute to work? Well, the pandemic showed us that we could cut down on these unnecessary commutes, saving time, energy and money. With companies now allowing more and more people to work from home, it is being forecasted that in the coming times, people will move from congested city centre to peripheral areas with townships that have open and more green spaces. Moreover, it is also being said that as more and more people will continue working from home, they will opt for larger houses with dedicated workstations, recreational space and extra bedrooms. And given the cost of land in our bigger towns, such homes will be possible in the peripheries where land prices are still affordable.
In the light of these facts, the future of residential real estate is positive and although it might take some time to pick up, it will do that in future.