After what can only be described as a year of remarkable resurgence and growth, the real estate sector promises to scale new heights in 2022. As the demand for housing rises exponentially and the government strengthens its impetus, the market will present abundant opportunities for sellers and buyers. The pandemic-led uncertainties have fundamentally altered customer preferences and significantly impacted buying patterns. Over the last 20 months, homeownership has emerged as a compelling aspiration. Today, wellness and financial security form the fulcrum of homebuying decisions.
With the widespread adoption of hybridised work structures, the need for multi-functional spaces and smart amenities will sustain in 2022. With commute-to-work no longer being a prominent factor, properties on the peripheries will witness greater traction. A recent ANAROCK study revealed that 68% of aspiring homebuyers are looking to move to suburban areas. Customer analytics also indicate that health-focused features like access to green spaces and designated areas for fitness will remain a top priority for homeowners.
As the investment appetite continues to build, we will also see more customers expanding to non-apartment asset classes like plotted developments in larger numbers. This can be attributed to the greater flexibility and profitability margins associated with such investments.
Trust at the centre of business
In the highly competitive real estate landscape, customer experience will be the core differentiator and measure of success for realty players. As we stand at the precipice of a new era, discerning the current needs of the homebuyer will be inadequate; developers should be equipped to anticipate the expectations of tomorrow as well. Builders must ground their business decisions on customer analytics to thrive and remain relevant.
While technology will continue to bridge the gap between builders and customers, it will also play a bigger role in shaping the customer experience. With the adoption of IoT (Internet of Things), homes are now more automated than ever before. Therefore, builders and developers would be compelled at providing intelligent homes to new home buyers looking for contemporary and innovative living spaces. Homes would come pre-installed with Google Home devices that would allow residents to convert their living spaces into voice-enabled smart homes, giving the resident control over compatible smart home appliances, listen to music on demand, stay on top of their day-to-day activities and bring the power of the Google Assistant into their homes. Marrying tomorrow’s technology into home construction solutions would become and should become a norm and not an afterthought post construction. As the market becomes increasingly end-user-driven and hinged on virtual processes, generating trust will be a non-negotiable imperative. With more homebuyers opting for reputed developers, the latter will be tasked with creating a transparent and seamless buying experience.
Mapping the growth corridors
2022 will herald active growth, innovation, and investment in the Indian realty space. New opportunities will emerge across residential and commercial segments of the real estate industry.
A recent report by ANAROCK states that new residential unit additions increased by 90% in the third quarter of 2021. Therefore, we can predict the emergence of new housing markets that will drive the demand for commercial infrastructure. The report also predicts a 5% price appreciation across the residential segment.
On the other hand, due to the aggressive hiring cycles, most led by IT/ITes firms, coupled with an increased desire for flexibility, coworking spaces are likely to witness a demand spike.
According to IBEF, by 2022, India will become the third-largest market for construction across the globe. With the government looking to boost the segment and a notable inflow of FDI (13% of the total share in FY21), this industry will be one of the drivers of economic growth over the upcoming quarters.
The sector is ready to take advantage of the surge in economic activity. Therefore, data centres and warehouses will continue to receive attention in the year to come.
All the key market forces point towards strong sector growth; most realty stocks are witnessing a bullish market cycle and outperforming their peers. We further anticipate the Bull Run to continue in 2022. The positive market outlook and increasing market consolidation signal the industry’s ever-growing stakeholder trust.
Will some markets do better?
Drawing from our on-ground research, the markets in the South will see enhanced growth and recovery compared to the other regions. This can be attributed to developers prioritising the completion of delayed projects, limiting new project launches and placing a greater focus on customer-driven decisions. Since the landscape is more end-user driven, developers will continue to innovate on behalf of the customers and take active measures to bridge the demand-supply gap.
E-commerce, IT firms, Startups (unicorns) in cities like Bangalore, Hyderabad, and Chennai are expected to be the key contributors in demand for residential and commercial segments. These will also be among the most preferred markets for NRI investors. With an increasing number of buyers opting for better affordability and connectivity, well-connected regions (especially peripheral areas) will likely witness a rise in property prices.
The future of Indian realty will be characterised by accelerated digitisation and a discerning customer base. While the concerns around the new variant continue to whirl, the sector’s impressive recovery inspires confidence among stakeholders. Reputed players across the segment have attempted to distil the steep learning curve of 2020-21 into actionable strategies. Hence, we are optimistic that the sector is better prepared to navigate contingencies.
Going by the market indicators, sustained government stimulus and industry predictions, the industry is positioned for exponential growth and lower volatility in 2022.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.