The real estate sector has remained resilient in the face of the numerous hurdles in the past, including the more recent pandemic. With adequate support from government initiatives, 2021 & 2022 saw the real estate sector record strong sales and this trend is expected to continue into 2023 as well. The emerging trends that one can foresee during this year include:
Gated Community Projects
The one thing that the pandemic brought to the fore was the need for safety, security and proper management. All of which were afforded to those living in gated community projects. Hence, it is to be expected that many home owners are showing a preference for projects which have large open spaces and can accommodate all the amenities associated with modern day living. In fact, many luxury projects within Tier I cities are also catering to this trend and are being planned with wellness amenities as well as providing excellent management services and retail outlets.
The ‘work from home’ trend is continuing post pandemic and many offices are providing hybrid options to employees as well. Thus, homes which have the square footage to create home office spaces are seeing a hike in demand. Home buyers are also looking at opportunities for homes where rooms can serve multiple purposes, and where spaces can be tweaked to incorporate lifestyles that accommodate living, dining, entertainment and work.
The efficiency of wi-fi and digital networks has really facilitated the growth of digital and on-line culture in India. Many sectors have embraced digitization including real estate. One trend over the past few years which is expected to continue into 2023, is the use of digital technology to showcase projects. Many homeowners are open to booking homes based on virtual tours without physically visiting the site. Communication via on-line video conferencing brings the human touch that some buyers crave. Moreover, several websites and real estate aggregators even offer neighbourhood reviews and updates allowing prospective homeowners to have a holistic idea about the project and its surrounding area. Payments are also facilitated on-line making the whole process streamlined and hassle free.
One trend that is going to be pushing demand in 2023 is the desire of people to own their own home. Rising rentals, especially in metro cities and the prospect of having to uproot and shift homes on a regular basis has created this demographic of prospective buyers, especially those with young families, who are seeking to buy their own home so as to commit to a feeling of stability and community.
Closely related to the above trend of wanting to own their own home is the trend of migration out of metro and Tier I cities to suburbs and Tier II and III cities. Home ownership in cities like Mumbai and Delhi poses a financial strain for most individuals and families. Also, with the government initiatives like Smart Cities, the infrastructure in many Tier II and III cities is being vastly improved with increased job opportunities and facilities of the lever that most people are accustomed to in urban metros. The urbanisation of ‘smart cities’ is a trend that is going to fuel a residential boom in real estate in these cities.
The demand for retail and commercial space will continue to be on the rise in 2023. Post-pandemic, there has been an increase in demand for retail space as well as hospitality outlets. While work from home culture continues, this does not seem to have affected the demand for office space to a great extent. Moreover, with the rise in on-line aggregators for sales of products, there will continue to be a growth in the demand for warehousing space as well.
The new generation of millennial home buyers are increasingly conscious of environmental issues. Thus, there is a growing trend of ‘green’ sustainable architecture and more projects being planned as per the requirements of a green certification including accommodating such facilities like rain water harvesting, solar power to light common public areas of projects, sewage treatment plants for large community projects etc. Of course, landscaped gardens and creation of ‘green lungs’ within the projects is a major deciding factor for most home buyers. In fact, even the current budget has highlighted ‘Green Growth’ and sustainable development as a priority.
While one expects positive trends in real estate through the year, the increase in repo rates and hence interest rates on home loans could prove to be a dampener. However, with increasing aggregate income levels and with RBI and government initiatives to control inflation and give a boost to the real estate sector, there is every reason to continue seeing the glass as half full!