Today, the real estate market 2021 is one of the most resilient, overcoming the pandemic’s effects and achieving higher-than-average results in a short period of time. Furthermore, the government’s unprecedented fiscal and monetary stimulus has boosted the real estate sector and helped it stay afloat during the crisis. There are a few changes that may become a permanent part of our way of life as a result of the new normal. Keeping in mind the changing work culture, it will no longer be limited to just the home or the office. The combination of both will be critical to a holistic approach to life, which will, in turn, play a role in the revival of Indian realty.
Covid-19 has accelerated changes in the real estate market 2021, bringing with it a focus on safety and wellness. A paradigm shift has occurred across industries, and the real estate industry now has the opportunity to take the lead in re-strategizing, upskilling, and investing to reshape the industry. The initial nationwide lockdown has had a significant impact on all sectors, including real estate. However, with the lifting of construction lockdown restrictions, real estate has seen green shoots with gradual momentum in the housing market. The following are a few anticipated trends for the industry in 2021, with signs of revival already taking centre stage.
Trends in real estate market 2021
Increasing demand in the residential sector
According to an industry report, property searches increased by 30-40% compared to pre-Covid levels. The real estate industry has seen a growth in demand, with buyer preferences shifting primarily to affordable and mid-segment properties. Following the lockdown, the luxury sector has seen significant growth.
The pandemic has highlighted the value of owning a home. It has also highlighted the importance of having separate spaces for work and play. With companies continuing to offer work-from-home opportunities, consumers are not compromising on the size of their homes. Homebuyers are also considering moving to surrounding areas. This trend is likely to continue into 2021.
Even before the pandemic, real estate was regarded as a stable asset class and preferred investment option. As millennials become increasingly interested in property, this trend is expected to continue in 2021. Furthermore, with digital interventions transforming the sector, a much-needed boost for a stable growth trajectory will be provided.
A buyer’s market
In 2021, buyers will benefit the most. As developers offer various appealing schemes to offset the recent market slowdown and infuse demand, ready-to-move-in apartments have seen an increase in buyer demand. With the Government’s initiative of “Housing for All” by 2022, there has been a boost in the segment, and various rules and regulations, such as GST cut-rates ranging from 8% to 1% for the affordable housing segment, have further encouraged home buyers. Besides this, under PMAY, the government’s efforts to extend the deadline for the Credit-Related Interest Subsidy Scheme to March 31, 2021, have benefited the middle-income strata, allowing them to purchase property with limited funds.
Work from home evolves office outlook
Companies that have invested in digital capabilities have seen great success with remote working policies, and this is expected to continue at least until June 2021, given the global environment. While commercial space occupancy increased prior to COVID, due to the extended work-from-home option, office space occupancy slowed. According to industry estimates, the commercial real estate market, which was growing at a rate of around 8% per year, is expected to plain for a few years.
The impact of the lockdown on office spaces has been relatively small, accounting for only a small portion of global firms’ overheads. However, this unprecedented period has prompted businesses to go back to the drawing board in order to re-strategize their approach to the traditional workplace. Firms that can reinvent themselves and devise out-of-the-box solutions to stay connected with their target audience will be successful in the post-covid era.
At the moment, co-working spaces account for a minor portion of the overall real estate market. There will be some progress in flexible leasing arrangements in 2021. This will shift the demand curve for a shared economy upward in the real estate market in 2021. Only a few industries, such as logistics, fin-tech, and BPOs, will continue to operate remotely. According to an industry report, flex space market growth will slow down and become more organic from now through 2021. Staggered timings are becoming more common in many organizations, so having some employees rotate seats will boost productivity. The rise of co-working spaces is likely to raise property prices for projects in their vicinity. An industry report predicts that the share of co-working space in office leasing will skyrocket in the near future.
Co-living in India
Within India, the co-living model is most popular among single millennials, such as young working professionals or students. As millennials move closer to cities, they desire less traffic and a shared lifestyle with shared amenities. As a result, co-living will continue to grow in popularity. The service offerings will also streamline and expanded. In such an unprecedented period, co-living will be difficult since people prefer single occupancies to share. As businesses settle in, co-living will no doubt recover, and newer opportunities will emerge during the next two quarters. Because of the pandemic, co-living has slowed since March of this year. Since November, there has been an uptick in the space. This will continue, and the co-living market will rebound dramatically in the second quarter of 2021.
The path ahead
This will lead to a more intense and vigorous real estate marketplace than the pre-covid period, Savills reports. Residential sectors expected to experience the most growth in the first two quarters, but commercial will soon catch up.
As an investment vehicle, real estate will provide stability, security, and investment benefits in the post-covid era.