The housing market has changed exceedingly since 2020. The Indian housing market too was hit and movements were sluggish. But as we moved forward in the decade, signs of revival were recorded and the market showed tremendous resilience. Fast-forwarding to 2022, we have an entire year ahead of us. What will the housing market look like in 2022?
Market overview
The Indian residential real estate market is set to make a compound annual growth of 5% in the period of 2022-2027. There has been unprecedented damage caused by the pandemic and as per evidence, more than INR 1 lakh crore because of COVID-19. The pandemic has also caused a huge financial crunch for developers as the loan crunch reduced to 2.8 lakh units in 2020-2021, a big dip in comparison to four lakh units in 2019-2020.
But the dark days of the pandemic are over as the central bank of India is projecting GDP growth of 9.5% for FY 2022. This upsurge in the economy is set to work in favour of different sectors such as residential projects, offices, data centres, and warehouses.
We have also prepared a list of some top trends in the market to look out for in 2022:
The residential market has got a strong footing
The prices of residential projects such as apartments in Chennai and various other metropolitan cities are set to rise after a prolonged period of stagnancy. Around 5% of capital growth is set to project itself in the residential property segment in India in 2022. Due to supply and demand-based factors, the price of residential properties and plots are showing an upward movement in the last decade. Hence, if you are planning to buy a plot near Mannivakkam, this is your chance to invest before the prices escalate even more. This momentum in residential sales is to continue as prospective homeowners are opting for bigger houses equipped with amenities that are priced at an attractive range.
Office sectors are set to grow even further as the Information Technology field expands
With a leasing momentum observed in the Information Technology sector, the office market will be in need of bigger spaces. Top IT companies are expanding their office spaces to nearly 11.67 mn sq ft in the upcoming days.
Co-working spaces
The COVID-19 pandemic created a sense of uncertainty and businesses tried their best to remain flexible in every aspect, especially the cost component. Businesses in fact have benefitted immensely from co-working spaces as the pandemic keeps reinstating the need for agility like never before. The need for robust and hybrid co-working spaces will drive up the demand for flexible office spaces as well as residential projects with designated workspaces.
Proptech and its evolution
2021 has a ready acceptance of Proptech in all aspects of real estate- construction, sales, customer interaction, and management of assets. This trend is here to stay and will be evolving even further. Online property search has gained immense popularity as it is just a simple Google search- ‘luxury flats in Adyar’ or ‘apartments in Chennai’ that fetches you thousands of results. The best part about the evolution of Proptech is not just connecting customers with the best deals in the real estate sector, it is also the availability of different services such as virtual or 3D tours, apartment management, movers and packers, virtual site visits, digital payment integration, online rent agreements, etc.
Improvements in the demand and supply metrics
With the change in the concept of property ownership in the post-pandemic phase, support from the government and the bank sector has resulted in an improvement in the demand and supply metrics in the real estate sector.
States can also help new homeowners with incentives, circle rate waivers, and extending stamp duty.
Increase in the number of NRI clients
The real estate sector in India considers NRI, especially those who are residing in the United States and the Gulf as high potential clients. They look for larger, more spacious, and more luxurious apartments in Chennai and other metro cities as they grow accustomed to a better lifestyle. Various changes in the real estate sector such as postponement of the RERA deadline offers from developers have worked as tractions for NRIs to invest in residential properties in India.
At present, a huge population of NRIs is on the lookout for residential projects for their own use and also in the form of investment. This is set to create a greater demand for luxury apartments and villas in the residential real estate sector of India.
Buying vs renting
Now that we have an overview of the trends in residential projects, you might also consider the question of buying or renting a property in 2022. The most appropriate answer to the question would be your availability of finance. Buying a property is a big financial investment and requires substantial planning. While the government has extended the option of affordable housing and controlled the rates of interest, you still have the option of buying a property rather than renting. But, the cost of renting too is set to rise and a great deal of groundwork for a year is required before you can arrive at a decision. Context and situation also matter to a huge extent when it comes to the dilemma of renting or buying property. Hence, this question can only be rent for one family and buy for another.
