The Indian real estate market has seen a roller-coaster of a ride as far as demand, traction, and supply are concerned all of last year. Ultimately, the curve has settled on the growth side, which is a more-than-positive indicator for what 2022 holds for the industry.
2021, especially Q3 and the ongoing Q4, have seen the tide of fortune turn back in favour of this crucial market. Across different segments, viz, housing, commercial, retail, and hospitality, Indian realty has got well over the aftermath of COVID-inflicted slowdown. We look at the five biggest take-aways for all stakeholders of the industry, namely, buyers, investors, property owners, developers, agents, prop-tech players, and more. Effectively, these are the identified trends spearheading the big Indian real estate revival.
Data Analytics
Data Analytics, as a function, signifies the need to manage and analyse voluminous business data being generated by different real estate players daily. It further nudges them to leverage the same by gathering relevant business insights and use them for effective decision-making.
The online search for property purchase, investment, and rent has grown by leaps and bounds. With every click by the user, a unique data point is generated along with associated business information. It’s become important for businesses to value and leverage each one of them.
Online property listings and bookings are set to grow and stay in the market. Furthermore, their integration with social media and the ability of businesses to capture live customer information (and act upon it) is going to set them apart.
Front-line real estate business functions such as lead generation, sales meetings (whether physical or online), and property tours (whether physical or virtual) are henceforth incomplete without relevant data and research backing the offerings.
Digital marketing
A large base of potential home buyers and property investors have moved online with the advent of social media and the accompanying need for digital marketing. Not just the COVID factor has played a role; however, this had also been true during the pre-COVID era and is becoming the norm as time passes. Video and VR-based virtual property tours are the in-thing, by giving buyers ample options to weigh, compare, and finally, zero in. Developers and agents, that have been tech-savvy and digital marketing-oriented, have realised greater conversion rates, as also quicker communication, and transactions.
Commercial sector
Along with their housing counterpart, the revival of office spaces and commercial real estate has only acted as the icing on the cake. India’s net office absorption stood at 5.85 million sq. ft across the top seven cities for Q3 2021. In the process, it clocked a 48% growth from Q2 and 12% from Q1, along with an 8% growth Y-o-Y. The factors driving this growth were the mass vaccination drive, unlocking of the economy, and the awareness and preparedness against COVID in general.
This resurgence in office space demand is reckoned to be sustained by many experts, as even the gross leasing volume crossed 6.3 million sq. ft during Q3 2021, clocking a 25% growth on a Q-o-Q basis. All in all, tier-1 cities lead the office absorption market in terms of volume and net absorption numbers. Tier-2 and tier-3 markets are expected to follow suit in the quarters to come.
Popularity of REIT
Real Estate Investment Trusts (REITs) have been catching up in a big way in Indian real estate over the past few years. Regulated by SEBI, they are companies that own, operate, or finance income-producing real estate. Pooling together the capital of multiple investors, REITs make it possible to earn dividends from office property investments in India.
All in all, the REIT space in India has been witnessing an upward trajectory despite the aftermath of the pandemic. This encouraging commercial trend could well open space for its expansion into residential, retail, and hospitality segments soon.
Eco-friendly homes
Organic living is a buzzword of today, as more and more Indian families prefer a negative water and carbon footprint from their homes. Be it in terms of solar electricity panels on roof-tops, rainwater harvesting system, natural ventilation, and lighting provisions, or ample green area as a part of the house, eco-friendly living is the way to go forward for a fast-rising number of homebuyers.
These five are going to carve the road ahead for Indian real estate in 2022. Developers, agents, and other real estate stakeholders would do well to consider these trends seriously to thrive and sustain.
The writer is Resource Specialist, Real Estate and Fund Management.
