Having faced three waves of the global pandemic and recurrent lockdowns, India’s real estate sector seems to be adapting to the new normal, only to become stronger. The sector is seen gaining back its ground consistently, as there is an upsurge in the demand both quarter-on-quarter (QoQ) and year-on-year (YoY).
The search and listing volumes in the major cities have witnessed a high growth QoQ. Also, the supply in these cities has surged considerably.
Overview: Global vs. Indian Scenario
The last quarter of 2019 introduced everyone in the world to an unprecedented challenge of the COVID 19 pandemic which did not seem to end soon. The first and third-world economies that were already on the verge of slowing down suffered immensely and the global economies crashed to bow down to their knees. The United Nations predicted an almost 1% decline in the world GDP in 2020 due to the COVID 19 pandemic. Though the slowdown impacted all major sectors, the worst hit was experienced by sectors like travel, tourism, aviation, hospitality, and real estate among others.
Within two years and a half of the COVID-19 pandemic, the global economy is poised for its most impactful post-recession recovery in 80 years. It is expected that the rebound will be uneven among countries, as many developed economies are likely to grow strongly while many developing economies are expected to lag.
Though the Year 2021 began with new hope in the face of the COVID-19 vaccine, it also saw renewed restrictions stemming due to the spread of the new Delta variant of COVID. The uncertainties remained rampant, but the real estate sector started to see signs of recovery as demand increased. According to a report published by the Reserve Bank of India (RBI), there is a substantial drop in unsold inventories and a consistent rise in sales. The Indian real estate sector started to make a remarkable recovery in 2021.
Real estate is witnessing a new and evolved buyer who is more inclined towards making a customized offering to be able to make the most of their investment. Hence, innovation, creativity, and digital transformation are slated to drive the segment in the future.
The Way Forward
Since home buyers have a trust deficit as some developers failed to deliver the projects, developers with proven delivery records are still able to attract them to their under-construction properties. However, it is possible, that concerns over the high inflation caused by events like the ongoing global geopolitical situation, disruptions in the global supply chain, and the rising costs of construction materials like cement, steel, and other raw materials, may negatively impact home sales in terms of price rise. Major cities are therefore experiencing an increase in rental housing demand. But as per the industry experts, India’s housing sector will continue to grow throughout 2022 even as the pandemic becomes endemic.