August 24: The sector of Real Estate, which has been in its periodic declivity since 2013, went through its most abysmal phase during the last two years owing to the pandemic. With a world struggling to survive, the business in this industry came to a complete cessation which only got worse with the second wave in mid- 2021. The working population escaped from the big cities and made abodes in the mountains, beaches or their humble hometowns. The work that kept them chained to these cities suddenly set them free through virtue of the “work from home” phenomenon. The world witnessed a catastrophic situation where every individual irrespective of geography, ethnicity, social standing, age and gender, had to pause, lament and start over.
However, despite the difficult last two years, mottled by the Covid-19 pandemic, there are signs of recovery in the economy and business sectors alike. As a result, the world will now start undergoing a new shift in lifestyles, ideas and preferences since many of the pandemic-induced behaviours are here to stay. Life is slowly coming back to the pre-pandemic era with people returning to offices, schools reopening and travel restarting. After a protracted period of plummeting and then steadying, the prices for residential properties are showing signs of rising again. The sales of the Residential Real Estate sector will continue to exhibit propulsion through the year 2022. The reasons contributing to this momentum are multifarious, as the mindset of prospective homebuyers is undergoing a lot of changes.
During the harrowing times of the Lock-down, families across the nation and globe were restricted in their homes with nowhere to go. People craved open spaces and larger living areas. This has very clearly created a demand upswing for larger homes with dedicated spaces for office work and exercise. There has to be a focus on quality and comfort in all areas, from green areas and gardens to uninhabited rooftops, as these will be the coveted accesses to fresh air, natural light, and ventilation, balconies, and terraces, basal and uncontaminated indoor environments, safe and filtered entrances, etc. Larger layouts and adjoining study formats will be a coveted segment amongst people looking for new homes in 2022. Search engine queries for 3+ BHK apartment configurations have shown a growth spurt since the end of 2021. Also, the share of sales in the INR 10 mn and above ticket- size grew notably to 25 percent in H1 2022 compared to 20 percent a year ago.
Pre pandemic, most working professionals wanted to inhabit spaces which were close to their offices. There was a lot of emphasis on proximity to the workplace in order to cull the stress of long travel to and from the office. During the pandemic, people were working from home, and corporates saw the merit in this style of working. As a result, even though the pandemic is over, a majority workforce is practising the hybrid model. This entails working from home on most days and going to the office once or twice a week. Home buyers equipped with the auxiliary adaptability due to the work-from-home options are ready to undertake lengthier rides occasionally. Due to this, they are able to afford bigger homes with open spaces that they craved in the last two years. Preferences for bigger homes, better amenities and attractive pricing will be the underlying attributes of home selection for most people going forward. Remote work options are here to stay and will continue to be a big factor in the residential real estate industry, creating a continuous demand for suburban housing for a long time to come.
Another key element that will determine the choices of people looking for homes will be proximity to medical infrastructure. As witnessed by all of us, during the peak of the first and the second wave, people traversed big cities looking for doctors and hospitals. In recently conducted surveys by key stakeholders of the Real Estate sector, accessible healthcare ranked among the top criteria in choosing a home. Real estate developers are now creating townships keeping this desired amenity in mind.
In our country, close to 90 percent of the home buyers avail of home loans from Banks and NBFCs to buy their homes. The rates of interest have declined from 9.5 percent to 7.5 percent post the pandemic, aiding people to take bigger loans. Fueled by factors like low mortgage and stamp duty waivers, even a market like Mumbai witnessed a healthy recovery.
Cataclysms are known impetuses for major changes in society and mindsets of people creating a paradigm shift in the whole ecosphere. It is the time of contemplation to remould and reconceive what shape the residential real estate industry will take for years to come. There is a need to adapt and reassess the space distributions and dimensional layouts with emphasis on individual needs and nuances.
by Mr. Mrinaal Mittal, Director, Blackteak Realty
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