After coming in contact with COVID-19 no one was immune nor was real estate sector. Even the real estate sector of India was not immune to the devastation and loss caused by the coronavirus. Although, after the second wave, the sector has finally started to show some signs of strength and has regained its momentum. The Reserve Bank of India is projecting a growth of 7.8% in GDP this financial year.
Real estate trends 2022
As COVID-19 did not spare anyone, the real estate sector was no exception. But soon it is going to witness an increase with approx 5% capital growth in 2022. Preferences for villas, residential properties, and bigger apartments with better amenities are likely to rise in pricing.
Below is the list of top trends to look out for from 2022-
1. The residential market is soon going to be on a strong foot
After a prolonged period of loss incurred due to COVID, residential prices are likely to start rising again. After assessing the demand factors it has been observed that around a 5% increase in the capital value growth for residential properties. And the sale momentum is likely to continue throughout 2022.
2. Continuous hiring in offices especially IT Sector
Nowadays offices are driven by the upswing in IT Sector’s leasing momentum. Based on the hiring process that occurred with top Information Technology organizations it is expected that the demand for office spaces is going to highly increase. The estimated office space would be 1.09 mn sq m in the near future.
3. Following the coworking strategy for flexible occupier workspace strategy
The fact that businesses now want to remain flexible because of the uncertainties created by COVID-19 . As COVID reinforces the need for agility the coworking sector would be best suited. This will drive the demand rebound for flexible offices spaces.
4. E-commerce rise to benefit the warehousing sector
Due to the boom in the e-commerce sector, a certain amount of growth is expected in the warehousing sector. Due to the eCommerce share in the warehousing sector’s transactions, an increase of 36% is likely to occur in the financial year 2023 as compared to the 31% from the financial year of 2021. So, indeed an overall growth is projected at a compound annual growth of 20% in the financial year 2023.
5. A decline in rental property
The reason behind the decline in the rental property market is that people migrated back which caused the rental demand for both residential and commercial properties to decline. People who were unable to afford to buy a property will look for alternatives while the ones who can afford will buy a house. Thus creating therental market to decline.
6. Digitising house hunting
The fact that digitization across all sectors has accelerated and the real estate market is no exception. Because of the COVID outbreak and the competitive housing market many investors and homebuyers bought their property without even stepping a foot in the place first. With the availability of 3D Tours, Drone videos, and Virtual Staging people were able to take a virtual tour of their properties. During the pandemic, real estate companies allowed home sellers to browse lists and get in direct touch with real estate agents and check mortgages. The demand for virtual staging which was high in 2020 is now going to decline.
7. Prices of properties continue to rise
The real estate trends are interconnected. Because of the increasing demand for single-family houses, prices for such homes shot up in 2020 and are expected to remain high from 2022 to the upcoming years. When the pandemic emerged initially the real estate market started to drop prices and those looking to sell their property reevaluated their decisions. But with 2022, the prices of homes have risen again and the seller market is going stronger than ever. For desirable homes, some buyers are willing to pay a substantial amount just to secure their purchase. That means if the market values increase then the home equity increases too!
Indian real estate market forecast 2022
The real estate sector in India in 2022 is expected to experience around 5% capital value growth. The sales momentum is likely to rise as homebuyers will continue to choose properties with better amenities. The attractive rates will keep people interested in sealing deals. As the COVID outburst has now decreased work from offices resumes and the commercial sector will keep rents stable so as to experience 2022 better. The government is looking out for ways to provide affordable housing to strengthen the current financial status. NITI Aayog predicts that the Indian real estate market will reach a certain market size and will show a 13% increase in GDP by the year 2025. Real estate is one of the top economic sectors that will bring economic growth.
Also read: Key Factors that will Drive Real Estate Market in 2022