The year 2022 has been quite promising for the real estate sector. With an aggregate market share of $200 billion, the Indian real estate sector indeed holds a significant place. Speculated to become a $1 trillion field by 2030, adding roughly 30% of India’s GDP by 2025, the sector is topping the list of investors globally. The year 2022 witnessed a massive change owing to reasons like the receding pandemic wave to a rise in ecommerce and office spaces.
While the CRE market observed a major downfall during the pandemic and lockdown, the revival occurred in 2022 because of various factors. Here are some trends that drove the momentum of real estate:
The pandemic lockdowns and restricted movements have forced every sector to go digital. Aspiring home purchasers and sellers, landlords, tenants, everyone is using realty portals and digital tools post the pandemic.
In just 90 days, consumers and businesses moved ten years forward. Developers adopt new technologies: Virtual Reality, Augmented Reality, 3D programs, and Artificial Intelligence. Developers provide prospects with a virtual tour of the property using 3D apps easily.
Demand for better and more spacious living spaces
People need more spacious homes now, especially with online education and the work-from-home trend following. The demand for flexible rooms like 1.5 BHK witnessed a 54% increase post-pandemic compared to 1BHK, while 2.5 and .5 BHK demands shot 150% and 132% increment across the top six cities, Chennai being one of them. 3BHK apartments witnessed a rise of 150% in 2021.
This confirms that more and more homebuyers are looking ahead for more prominent spaces and sizes, while 25% chose proximity to healthcare.
The pandemic ensued a standard change in consumer behavior, flaming a sense of home ownership and developing demand for bigger spaces supporting a better standard of living without compromising on the luxury aspect.
In the last two years, demand has grown towards homes big enough to house the new WFH and e-schooling needs.
Moving out of the city
With high capital value, limited open spaces, and high density in the central city, people are opting to move to the outskirts in search of better living standards. The significance of health, wellness, and hygiene have made homeowners shift their priorities.
More and more people are considering purchasing a home in the suburbs with open space, more greenery, and fresher air. It has also splurged the demand for second houses in a natural environment which can break the monotonous regime of daily lives.
Villas, apartments, farmhouses, and second houses were in demand as aspiring home buyers looked ahead to purchasing properties offering better social distancing and reduced risk of infection in less populated locations. Also, with flexibility in work, employees could work from anywhere.
Observing the demand, developers aim to launch more real estate projects near the metro. Such places witnessed increased traction.
Growth in democratized investment models
Investment models such as fractional ownership and REIT have gained momentum in the last few years, offering new hope in the promising asset sector. Such models have supported retail investors with a restricted budget to be a part of commercial real estate.
In conclusion, India’s growth as the rapidly growing economy in the world has created a buzz across other sectors. Post the pandemic, 2022 has been the first active year to support India’s real estate growth in several ways. Residential and commercial real estate both have witnessed a growth and proven to be the backbone of the economy like never before. And this growth is speculated to grow further in 2023.