Lalbaug-Parel neighbourhood in Mumbai Image Credit: Shutterstock

For Indian real estate, the year 2020 was primarily transformative. It saw accelerated consolidation, increased digital adoption, and erosion of sales by close to 70 per cent when the pandemic and lockdowns were at their worst. However, we ended the year with sales that broke records standing since 2013, and state coffers saw a huge increase in monies paid for property registrations. Buyers who were sitting on fences for years finally took the plunge and made their investments.

As we look forward to the year 2021, five key trends are expected to define the Indian real estate market this year.

The vaccines

The world heaved a collective sigh of relief when the first vaccines were announced.

For real estate, this is especially welcome news. Homes are still one of the most expensive purchases made by households, so a lot of sentiment influences decisions. The arrival of vaccines is bound to positively impact market sentiments and provide relief from the uncertainty and negativity, which had crushed the market in the first half of last year.

Community living

The shift in preference to live in communities is coming to the fore in 2021. Lower government taxes, self-sufficiency inside community projects and the ability to monitor and regulate the flow of services into the complex are the major reasons for this change. After the Covid-19- imposed lockdowns and follow-up rules and regulations, more Indians now prefer relative independence and societies, which have the benefits of retail, medical and health facilities inside the premises. Large townships, apartment societies and plotted developments will ride this wave.

Asset versus liability

Covid-19 has given real estate a new set of buyers. The millennials have taken to the property market in the wake of this pandemic. Earlier, young professionals did not see real estate investment as lucrative enough to interest them. However, with curtailed rights of tenants during lockdowns, this sentiment has changed. We are seeing huge investor activity in the age group of 32-40. This group has realised it is better to pay EMI instead of rent, and to build a tangible asset in the process.

Also helping this movement is the record low home loan rates currently prevalent in India, which have brought down the EMIs to par with rents paid in decent societies.

With WFH gaining widespread acceptance and schools and colleges continuing online, there will be a considerable increase in enquiries for 2.5 and 3.5 BHK homes.

- Shajai Jacob, CEO, GCC (Middle East), ANAROCK Property Consultants

Space matters

2020 also introduced Indians to the work-from-home (WFH) concept and option. However, the initial excitement quickly turned to chaos as parents and kids jostled for space to carry out their online work and learning assignments without disturbance and interference. Throughout the period of August to December in 2020, the demand for flexible spaces in homes increased. Those who had already booked homes sought to upgrade, and those who were still mulling a home purchase now considered opting for an additional 0.5 BHK space at least.

With WFH gaining widespread acceptance and schools and colleges continuing online, there will be a considerable increase in enquiries for 2.5 and 3.5 BHK homes.

A-listers only

One of the major surprises thrown by 2020 for Indian real estate was the share of market by the top developers. As sales reduced and gradually recovered, the share of Grade-A players grew across markets. Indian buyers were no longer ready to risk their money with developers whose credentials were not yet established. We have seen the current market leaders do extremely well, and expect the entry of big corporate houses in the residential sector soon.

Indian real estate went through an extensive metamorphosis in 2020. Fortunately, we have not only come out of it but are now stronger than before. For domestic and NRI homebuyers, there has never been a better time to invest in Indian properties. Historically, periods like these are followed by a surge in economic growth leading to considerable wealth creation for early investors. The success of the many vaccines being manufactured, tested and administered will aid in this growth surge. When that upwards rally starts for Indian real estate, it makes eminent sense to be a part of the ride — not just a spectator. ●

The writer is CEO, GCC (Middle East), ANAROCK Property Consultants