Realty has gained a lot of ground lost in 2021, to do better in 2022: Developers
With strong demand, changing trends and new emerging markets at the forefront of industry growth, the coming year is likely to be a landmark year for the real estate industry.
The year 2021 has been a turning point for the Indian real estate sector, as despite the difficulties, the sector has gained a significant part of the lost ground.
According to a report by Colliers, the residential segment saw strong recovery gains thanks to government stimulus measures, market-induced price discovery and new demand. In the first nine months of the year, investments in the residential sector amounted to $ 420 million, exceeding the volumes seen for all of last year. Investments are stimulated by renewed residential demand, driven by a greater propensity to own a home, low mortgage rates and stable prices.
On the other hand, the industrial segment is expected to see investments of around $ 1 billion in 2021. Even the demand for office space in 2021 is expected to exceed the average gross absorption between 2016 and 2018.
Commenting on real estate trends, Pankaj Bajaj, MD, Eldeco Group, said: âIt has been surprisingly a great year for real estate, especially for residential. After the pandemic, low interest rates and increasing demand for larger homes were a catalyst, and we have seen growth in both sales and prices. This trend has been observed not only in Eldeco’s main markets in North India, but across the country; in fact, the whole world. We believe this trend will continue. First, we are emerging from a multi-year housing decline cycle. And second, something has definitely changed on the buyer’s mind – they all want to move on to a bigger, better home.
The developers say that while the COVID-19 pandemic has presented unprecedented challenges in all industries, in the real estate world, it has resulted in sweeping changes in consumer behavior and preferences. He also announced a shift in customer preferences towards organized developers with solid credentials and excellent track records.
âWith working from home and cyber school becoming the norm, owning a home is not just an asset class for investment, but a necessity. Working from home has become the mainstream in shaping the preferences of home buyers. We expect the buzzing home selling activity to continue, for the outskirts of town to maintain their top spot as the most demanded region, and for flexible work options to continue to shape housing decisions in the city. new ways in 2022. Strong end-user interest supported by government stimulus measures and developers’ plans will further boost demand in the residential segment. If we continue at the current pace, the real estate industry will recover to pre-Covid levels, âobserved Mohit Jain, Managing Director of Krisumi Corporation.
In addition to the residential segment, the office segment also held up. Flex spaces, for example, have emerged after a year of gap, to occupy a significant share of leasing at 16-18% in 2021. According to Colliers, the total flex stock in metropolitan cities is expected to reach around 40 million square feet in 2021.
âThe commercial real estate industry has made a comeback in the post-Covid era. Overcoming the obstacles posed by the pandemic, the office sector has shown great resilience. The booming return to the office and adaptation to the hybrid work model have supported the growth of the office sector in all cities. Industry reports point out that the wave of aggressive hiring of IT companies, ITeS companies, new business deals and expansion plans has led to impressive rental deals in Class A office space in the September 2021 quarter, âsaid Abhishek Pandey, vice president of customer engagement and distribution, Viridian ROUGE.
The changes induced by the pandemic have propelled the demand for flexible office space and hybrid models not only in subways, but also in Tier 2 cities. “The trend is going to dominate over the coming year, increasing further growth in the office sector. Due to aggressive government policies, propulsive business ecosystem, business expansion plans, new and emerging trends, we expect an increase in demand for Class A office space in 2022, which s ‘will turn out to be the year of growth,’ added Pandey. .
Vineet Taing, President of the Vatika Business Center, said: âThe global health crisis has changed the working trends of many companies, government officials and all large companies. The merger of Class A commercial real estate, coworking spaces and offices with well-connected infrastructure and attractive investment opportunities has gained momentum. The magnificent shift from traditional work stereotypes and work from home trends to coworking spaces and hybrid working styles has pushed the big players in the market to embrace new business models.
âHowever, despite the setbacks, office space is now experiencing a good resurgence. We are confident in our robust and innovative operations across the country. We are also leveraging our office spaces with cutting edge technologies and smarter offerings as well as customer satisfaction. The office space industry has proven to be resilient and is now poised for a brighter future, âhe added.
Outlook for 2022
The unprecedented COVID-19 pandemic has prompted the industry to âthink, reassess and rethinkâ in preparation for the new normal. Since the start of 2021, there has been sustained sales growth in major Indian metropolitan areas, but NCR has seen a huge jump in demand for housing with a flurry of new launches across all segments and product categories. The year was also marked by a transformation in the preferences of home buyers.
Aakash Ohri, Group Executive Director and Commercial Director of DLF Ltd, said: âOne of the most significant trends this year has been a surge in demand for housing in the luxury and super luxury segment. Today’s savvy buyers have shifted their buying decisions toward luxury homes, whereas previously they invested in other asset classes or luxury goods. 2022 will be a time to reconsider everything – how we are building communities and places to be even more resilient, healthy, attractive, sustainable and creative at the same time. The industry will continue to be vibrant and as we move forward into the post-COVID phase, sustainability will be the centerpiece of the real estate narrative. “
According to the developers, despite the commercial disruptions due to the pandemic, the sector experienced a strong rebound in 2021. Supported by strong economic growth, the real estate sector quickly picked up speed.
Mohit Goel, MD, Omaxe Ltd, said: âThe trends induced by the pandemic, coupled with low interest rates, affordability and other favorable factors, have increased real estate growth in the cities of level 2/3 and should lead to the growth of the sector in the coming years. New asset classes like high-end and mixed-use commercial buildings have found favor with investors and buyers. Likewise, in residential and urban projects, tall houses have become a preferred choice and will continue to drive real estate growth in the years to come. With strong demand, changing trends and new emerging markets leading the sector’s growth, the coming year is likely to be a landmark year for the real estate industry.
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