How Much the Indian Real Estate Industry Has Changed Since the Pandemic?
The real estate industry looks unrecognisable compared to the last couple of years. The primary reason behind this change is the onset of the global coronavirus pandemic, which turned the world upside down overnight, and real estate was a part of that revolution too.
In this particular industry, where everything used to work on paper-based processes and real-time, physical meets, challenges came out to be tougher than thought. The adoption of real estate technology came in late, and the industry saw an uplift only as the pandemic started to fade away.
This change sparked a series of events where now the role of technology has increased significantly in the property industry. Automation, Online Collaboration, Digital Payments, and more as part of the integrated PropTech ecosystem have simplified real estate processes and are on the verge of transforming them completely.
So, whether it is the new ways of selling, marketing, forming partnerships, or bringing new experiences directly to the customers, the stakeholders must stay relevant to news, developments, and trends and be ready for any kind of unexpected changes that come forward in the industry.
And for the year 2022, we will take a look at some recent developments that have happened since the decline in the global coronavirus pandemic. Let’s start with the rise of PropTech.
The Rise of PropTech
PropTech, or Property Technology, rose in the aftermath of the global pandemic. Taking advantage of real estate technology, businesses simplified their operations while driving maximum productivity and efficiency.
PropTech is revolutionising the industry in terms of:
- Regulation & Governance- Government Schemes & RERA in favour of customers
- Digital infrastructure – Taking the lead in digitalisation
- Tech-savvy Talent – High-quality tech talents
All of this development translates into:
- Digital real estate search and transactions
- Virtual reality/augmented reality for virtual site visits
- Big data and analytics for making informed decisions
- Building & construction efficiencies.
- Home automation and smart buildings.
- IoT-based amenities & facilities
Ultimately, PropTech is paving the way for generating more revenue, saving on costs, & optimising the operations.
Preference for Co-working Spaces
Commercial real estate is also on the verge of witnessing a whole new trend. The balance of owning a dedicated place for work has now shifted to investing in a co-working space where businesses can hire space and make rooms as per their convenience. This change is also coming from the likes of having the support of integrated PropTech ecosystem.
Here’s why co-working spaces are witnessing a surge:
As the business doesn’t have to pay for the complete setup, they don’t have to pay for the same. Such smart investment turns to save a lot of money for companies
The convenience of running the business twenty-four by seven without restrictions
The presence of extra activities and refreshments for employees in a co-working setting. Such a setup contributes to employee satisfaction alongside delivering high productivity and efficiency from the business
A sharing platform with other businesses in the same space. Investment in co-working space can form collaboration, make new contacts, and forge new partnerships
The Rise in Pricing
The rising demand for homes, rising costs of materials, and developers looking to take a more significant portion of profit have resulted in a hike in the overall costs. As per the reports, the average price range across cities goes from 7% to 1% for the cities Bengaluru, Pune, Mumbai, Kolkata, NCR, Ahmedabad, Hyderabad, and Chennai.
From the perspective of developers, they have been reluctant to increase the pricing of their homes given the conditions of the global pandemic. However, as now the world is recovering to its original place, developers have been seen reviewing their pricing strategy and starting to increase their pricing.
Experts say that first-time homebuyers must take action now if they want to invest in real estate before the prices rise even more.
Government Schemes & Offers
The good news for homebuyers came in the form of this year’s 2021-22 Union Budget that involved extending the tax exemption benefit on interest on housing loans up to 1.5 Lakh. The Tax Holiday and affordable housing projects also received positive news in the Union Budget.
The government has also announced the establishment of the Affordable Housing Fund (AHF) at the National Housing Bank (NHB). The initial capital came to be Rs 10,000 crore to finance HFCs using priority sector loan shortfalls from banks and financial institutions.
Furthermore, the Pradhan Mantri Awaas Yojana has received special attention, particularly in rural areas. This move recorded a Rs 48,000 Crore allotment for constructing 80 Lakh residential units across the country.
Another move from the government was directed towards digitalisation of land records that have been paper-based for so long. Such a powerful move will give a boost to real estate technology and also the whole integrated PropTech ecosystem development.
Increased Traction from Homebuyers
Besides all these major cities mentioned earlier, online research and ongoing trends highlight tier-II cities such as Surat, Jaipur, Patna, Lucknow, Coimbatore, etc, seem to be back on continuing remote working policies. The result of this ongoing movement will favour homebuyers as they will look forward to owning larger homes within a larger neighbourhood with better access to healthcare, safety, openness etc.
The Emergence of New Factors
With so much progress toward sustainable development, large-scale projects are opening new ways to pull large amounts of investments. The emergence of green initiatives such as electric vehicles, solar energy, water harvesting, and data centres are driving commercial and residential real estate despite convention and retail spaces taking a major hit in the pandemic.
BeyondWalls being a leading real estate marketing agency, has witnessed a surge in customers’ demands to advocate the use of technology and green initiatives.
The Stability of Affordable Homes
Tracing a decade back to today, the demand for real estate has undergone a structural transformation on both the demand as well as the supply side. However, this fluctuation has made the whole residential space buying relatively safe for the homebuyers. Especially the affordability part which has seen monumental improvements over the past seven years.
The price changes that have happened in the last 5-7 years have all led to better affordability of homes. At the same time, the rate of home loan interest has been a deciding factor in improving the state of affordable homes in the past couple of years.
The Indian housing sector has been facing a number of challenges with regards to increasing inventory levels, extremely high unsold housing stocks, buyers’ market sentiments, investors getting cautious and so on. However, the positive sentiment is slowly coming back into the market without any cues from external factors.
Emerging signs of a turnaround in sentiment, demand, pricing, and sales have all combined to suggest that it has been out of the woods. With a changing outlook for India, we can now look at the housing market with more optimism than ever before.
Real estate developers and brokers can stay up to date on the latest trends, real estate market & technology by following India’s best Integrated PropTech ecosystem — BeyondWalls.
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The demand for homes has outpaced supply, leading to rising home prices. This is particularly true in major cities like Mumbai, Delhi, and Bangalore.
It is important to note that the market is still dynamic and there are a number of factors that could impact its performance, such as the overall economic climate, interest rates, and government policies.
That was really well-written and informative article which provides a comprehensive overview of the major changes that have taken place in the Indian real estate market since the pandemic began. The author does a good job of highlighting the key trends that are shaping the market.
Overall, the Indian real estate market has been resilient in the face of the pandemic. However, there are still some challenges that the market needs to overcome, such as the high level of unsold inventory and the need to attract foreign investment.
It was insightful read on Indian real estate market's transformation since the pandemic. Thank you for sharing this informative article that sheds light on the ongoing changes and trends in the Indian real estate market.
It's interesting to see how the pandemic has influenced the preferences of homebuyers, with an increased demand for spacious homes. Thank you for sharing your in-depth analysis of the Indian real estate market.