The pandemic years of 2020-21 was a period of uncertainty and a lot of market corrections for all major industries with real estate being no different than them. Major sales plumage and increasing costs with project delays and uncertainty brought about a lot of market corrections. From a complete standstill to almost a 80% recovery, the market has recovered well and is thriving towards a very positive note.
With the latest technology and marketing adaptations the real estate industry has been seeing a major comeback with stakeholders much well equipped to deal with uncertainties of the future.
From a peak in residential real estate sales in 2014 to 2020 supply was down by around 68% and sales were down lesser than 60% of earlier proportions. This bottomed out scenario pushed a lot of resilient developers and brokerage firms to up their technology and marketing games which has resulted in a very strong long term upcycle from the later half of 2021 onwards.
Just looking at the sales numbers from later half 2021 onwards, it is a clear indicator that the realty sectors in India has taken a strong position forward.
In the first half of 2021, around 2 lakh units of new residential supply were added across the top tier 1 Indian cities – a quarter higher than the 2020 full year supply – and almost 80% lakh units were sold out –a good 10% higher than in the whole of 2020.
This shows a phenomenal comeback in the residential real estate sector compared to any other previous years with the early quarter of 2022 following the upward curve.
A quick look:
- 2021 supply – more than 50,000 units, approx twice more than that of 2020
- 2021 sales – more than 70,000 units, twice more than that of 2020.
The Indian real estate sector has terraformed during the past few years and the pandemic has shown a new and improved version of the real estate industry in india
The key high points include:
- Digital First: Real estate has become a digital first sector in just a few months’ time from 2021. Developers and brokerages have adopted innovative and strong methodologies and solutions to catapult them as fore runners in the industry. The industry has taken a major leap forward digitally.
- Disciplined price increases: Unwanted price hikes have been taken out of the picture by developers resulting in a very structured, disciplines and market synonymous pricing structures ensuring that the demand cycle in undeterred.
- Focus on the end user: more than 75% homebuyers are now end-users, and investors have become more ROI driven and accordingly partnering with strong market drivers focussed on profitability.
- Home size in focus: The Work from home and e-schooling scenarios have pushed major design and functionality considerations into the developers plans. Developers have now started focussing into more larger size units to accommodate the growing change in the market.
- More than just apartments: While apartments still remain as the major sales driver for most developers, plotted developments and villas have also seen a good rise among many developers to increase their focus on the non-apartment segment.
- Non-affordable segments seeing a steady rise: As the pandemic did not severely affect the luxury group target customers net worth much luxury offerings were not severely impacted by the pandemic. Capital rich buyers proactively took advantage of the market conditions (subdued demand, stamp duty reduction, developer discounts).
- Villas, farmhouses and second homes were in demand as buyers looked to purchase properties that offered superior social distancing and lower infection risk in less populated, greener environs. Also, with WFH being the new normal, people could work from anywhere.
- Launch of major projects in outskirts with more than 60% launches in the further suburbs.
- Quick reorganisation:
– Sustainable Structural reforms and policy changes were quickly implemented and adapted by the Indian real estate sector.
– Stability of major players – Nearly half of the overall residential area sales today is sold by large listed and their channel partners. The pandemic and slump has given a major push to developers with adequate financial muscle, brand name, execution track record, and corporate governance will witness growth and success in the future.
– Global funds Reorganisation: Most global funds have returned back to Indian real estate industry giving it a much-needed cash inflow during the resurgence.
Zennlivving.com is one of India’s largest real estate investment and marketing firm operating across the country that invests, partners and works with real estate developers, channel partners and property owners maximising profit yields for all its stakeholders.
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