The Conditions of Real Estate after Unlocking in 2021
Lockdowns of a never-before-seen scale occurred in the year 2020. However, as the number of COVID-19 cases decreases and markets begin to open up, real estate dealers and potential clients are watching the real estate market with bated breath to see how it reacts.
Here's all you need to know about the real estate market after it's unlocked in 2021.
The current scenario of real estate market
Let's take a look at the current state of the Indian real estate industry before we talk about the future.
During April and May 2020, the real estate market, like all other areas of the economy, came to a halt. The market was affected hard by the rigorous lockdowns, significant movement restrictions, and uncertainty about the future, which resulted in a sharp drop in transactions.
However, once the limitations were eased and things began to return to normal, the real estate market began to recover.
Many cities are currently seeing increased demand in the residential and warehousing sectors. The epidemic highlighted the necessity of sound investing and fueled a desire to acquire a home. Residential real estate demand has been stimulated further by a range of discounts from builders and various government initiatives.
During the pandemic, a growth in e-commerce industry led to an increase in warehouse capacity in tier-II and tier-III cities.
What Effect Did Migrant Movement Have on Rentals?
The mobility of migrants was one of the main points of influence of the COVID-19 pandemic. Many employees moved from metros to their hometowns when organisations transitioned to work from home mode. They had to vacate their metro rents in the process.
The rental market was badly impacted by an increase in supply and low demand. In a number of places, the average rent has decreased dramatically. The luxury housing market saw a 30 to 40% rental adjustment, whereas the mid-to-low housing segment saw a 5 to 10% rental correction.
What are the current trends in real estate?
Many of the effects of the pandemic are only transient. Some, on the other hand, are destined to last. The following are some current real estate trends:
· A growing number of people are opting to buy a home in a gated community. Self-contained gated communities have become popular among house purchasers since they provide all amenities without requiring residents to leave the community.
· Away from the rush and bustle of the city, there is also a lot of interest in real estate. People used to prefer to live close to work because it cut down on commute time. However, the increasing demand for residential properties near office spaces resulted in higher rents or property prices. As many businesses transition to a hybrid work paradigm in which employees are not expected to report to work every day, many people prefer to live in property that is further distant but provides greater space for a lower price.
· Demand for residences in Tier-II and Tier-III cities has also increased significantly. Employees are preferring to return to their hometowns as many businesses permanently change to a work-from-home model. In the March quarter of 2021, for example, housing sales in Tier-II and Tier-III cities increased by 19 percent.
· The demand for co-working spaces is expanding, which is causing the commercial property market to pick up speed.
· Rather than having a single huge office in one location, many organisations are establishing smaller offices in various locations.
· Foreign investment in the real estate and construction industries is also significant.
· The storage industry is steadily expanding as the nation's reliance on e-commerce grows. Many e-commerce behemoths are establishing warehouses in tier-II and tier-III cities to shorten delivery times and ensure that their operations are unaffected by lockdowns or transportation limitations.
Real estate market predictions
Despite the short slump, the real estate sector is predicted to grow to a USD 650 billion business by 2025, contributing 13% to the country's GDP. The favourable prognosis of the real estate industry is due to a flurry of government actions and shifting sentiment in the property sector.
With SEBI's approval of the Real Estate Investment Trust (REIT) platform, the property industry is expected to see a surge in investment. The real estate sector is predicted to benefit from increased demand in education, healthcare, data storage solutions, logistics, and warehousing.
India's real estate market is resilient. Despite a modest setback in the previous year, current trends suggest that the sector would recover and return to its former glory. These are truly exciting times for the industry as a whole, with FDI and REIT.