By Pradeep Srinivas Vice President - CRM Strategy & Presales
Century Real Estate
After going through a period of slump, the Indian real estate sector is ready to make a solid comeback. This year, the focus will be on sustainable housing, implementation of technology, and well-planned residential and commercial developments.
Over the past few years, the Indian real estate sector has undergone significant transformations, and experts now forecast that the sector is poised for solid growth in 2022. Here are our top six predictions for the Indian real estate.
The year of sustainability
After the onset of the pandemic, sustainable living has found renewed focus, with the rising need to co-exist with nature driving customers towards green homes and eco-friendly practices. This is reflected in better open-to-built ratios, best practices in carbon footprint reduction, and integration of more green-cover and landscaping. There are also increased features like integration of service chambers under plantation lines, rain-water channelizing, groundwater recharge pits, and sewage treatment, among others. Furthermore, as the future of transport turns electric, there will be a steady rise in demand for electric vehicle charging stations. Thus, it is critical for developers to actively plan for EV-friendly infrastructure in both residential and commercial developments.
Rise of AI and ML
During an era of unpredictable lockdowns and restrictions, real estate developers must leverage technologies like 3D virtual tours and conversational Artificial Intelligence (AI). AI and Machine Learning’s (ML) present use is mainly adopted by tech companies, large publishers, and listing platforms. However, AI will play a more prominent role over the coming years in making categories like asset management and luxury more intelligent and experiential.
Convenience is key
With people spending more time at home than ever before, a key trend to notice will be the demand for well-planned developments. Customers now seek easy access to state-of-the-art amenities that allow them to live fuller lives without having to commute long distances. With hybrid work and education models, there is also a discernible shift towards gated communities and marginally larger configurations that allow families to live minutes away from facilities like convenience stores, gyms, schools, etc.
Interest rates
Compared to several mature economies with nominal to zero home loan rates, India still offers a high-interest rate, which is gradually but certainly softening down. Macro-trends like a widening tax base, increased job creation, and rising demand for mid-segment homes will support this decrease. For instance, this fiscal year to date (FYTD), the one-year average marginal cost of funds-based lending rate (MCLR) across banks moved by a good 18 basis points from 6.95 percent to 6.77 percent by the end of November.
Buying vs renting
Both buying and renting are macro-trends and will continue to grow independent of each other. While rentals will be supported by a young and mobile tenant base primarily composed of Gen Z and millennials, buying will include the overlap between millennials and older demographics. The pandemic has also witnessed more customers willing to invest in everyday homes and holiday homes for a much-needed change of scene. Thus, we can expect to see simultaneous growth in buying and renting as customers wish to use multiple amenities and live a more luxurious life.
The future of commercial real estate
Tenant retention and quality of work-life will be the key themes worldwide, with particular attention on ensuring resilience, business continuity, and holistic employee well-being. Another aspect is the prevalence of hybrid work wherein many companies, even tech giants, are leasing office properties in major cities. Current employment numbers have also led to more traditional businesses leveraging hybrid work as a recruitment and retention tool.
