Author: Mr. Dhiraj Bora, Head Marketing & Communication, Paramount Group
COVID-19 has engendered a mindset in which consumers are debating whether they should buy now or later. The best thing is that most of them are aware that the real estate market is at a stage where buyers/investors may get the best deals. Multiple real estate advisory companies have shown that property prices in most of India’s key residential markets have remained stable over the last few years, which is a compelling argument to invest in real estate.
In the midst of a long-term work-from-home trend, close to 50% people want larger homes. Since the epidemic, even those on the fence have started hunting for homes; these buyers are looking for 2 or 3 BHK properties. People have realised how important it is to live in gated communities to stay safe and healthy, and this pattern is clear. Nuclear families are now thinking about their long-term demands as well as their urgent demands.
The pandemic has made people understand how important it is to have a designated area inside the house for various activities. Since the epidemic reached India, the desire for larger homes has skyrocketed. Understandably, sales of premium residences increased as well. According to the Anarock research, sales of residences valued at more than Rs 1.5 crore accounted for 9% of total Q1 2021 sales in the top seven cities, up from 6% in Q1 2020. Buyers are looking for properties with a variety of facilities, particularly those related to health and wellness.
Also, the last one year has seen the demand of ready-to-move-in units swell in almost all real estate segments, including luxury, affordable and mid-segment housing. The share of RTMI homes in total housing sales in the primary market increased to 21% in the pandemic-hit 2020, up from 18% the previous year, as home buyers preferred completed apartments to avoid the risks associated with under-construction properties. In 2015, RTMI accounted for 7% of overall sales, rising to 10% in 2016, 13% in 2017, 15% in 2018, and 18% in 2019. For the past few years, ready-to-move-in homes have been popular, but this does not mean that people will solely prefer these homes after Covid-19. Because of the price differential, it is only suitable for those with sufficient budget.
Earlier, real estate market was investor driven, but today it has become an end user market. The transition from investor to end-user started few years back in the residential segment, and with COVID, the scale has further dipped towards the end-users. Since COVID, end-user interest has increased mostly due to the all-time low home loan interest rate regime, which was initiated through steps taken by the government and the RBI. The market has benefitted by becoming end-user driven as the developers are now focusing exactly on the target audience. The projects are being designed keeping in mind the sensibilities of the end-users, which is an indication of healthy growth in future. Looking at the demand and supply gap, it is clear that it will take years to fill it, opening up huge avenues for real estate development.
Only customer-centric developers with a track record of producing high-quality products will be able to thrive in the New Normal. It is not the time when a developer can dole out sub-standard products; buyers are only seeking projects that provide them green and healthier home environment.