Trends Covid-19 has brought on in the real estate industry
It is clear by now that Covid-19 pandemic has forever altered the way we live and work. Our offices, our homes, our outdoor spaces, every place has been impacted by the virus. Each and every sector of the economy, including the previously healthy realty sector, has been hit by the novel coronavirus pandemic.
As new trends emerge, the realty market is not going to be the same in a post-COVID world. The demand and supply dynamics will evolve and change.
a) Home Ownership: Covid-19 has changed the way buyers think. The concept of owning a home has gained renewed importance despite an unavoidable economic slowdown & the palpable uncertainty in the market. The lockdown has also reinforced the importance of owning a home because it is probably one of the only places where one can feel safe and secure. Hence, people who were previously comfortable living in rented accommodations would now prefer to buy homes soon. The home will once again take prominence over the place of work and influence urban development and our real estate choices.
b) Digitisation: The real estate industry, like all others, has also been quick to adopt digital solutions. The crisis has unwittingly shown us that there are varied as well as cost-effective ways to conduct human activity. The world has now stepped into a zone of digital-irreversibility. The real estate market will adjust accordingly and will feel the impact of digitisation; whether it is transactions, capital deployment, property management, virtual tours, or even the consumption patterns, digitisation will dominate most of the processes. There are also innovations with respect to Artificial Intelligence (AI) & Virtual Reality (VR) in this sector that are pushing for more opportunities and enhanced customer experience.
c) Distance doesn’t count: Remote working as a trend is here to stay, even after the pandemic loosens its grip, most companies will explore some version of WFH for its employees. Hence, commuting is no longer an issue for those working from home and this will reduce the need to buy a house close to the workplace. As a result, people will be more open to moving to peripheral locations for better affordability. The ‘walk-to-work’ concept may lose some of its sheen and prospective homebuyers will see the sense in shifting to locations within an affordable locality.
d) Affordable Homes: Over the past few years, the affordable housing sector has been given a push by several government initiatives. A considerable portion of India’s workforce in the organised sectors is from Tier II and Tier III towns. Most of these people have been forced to leave their temporary rented settlements in Tier I cities and go back to their hometowns. This will lead to an increase in demand for affordable housing in these Tier II and Tier III areas. Also, schemes such as the Pradhan Mantri Awas Yojana implemented to push affordable housing, will prove beneficial for home buyers and builders. The incentives for developers such as subsidies, tax benefits, and institutional funding along with the standardisation of the very definition of affordable housing, and reduction in GST rates have paved the way for healthy investment in this sector.
e) WFH residences & revamped commercial realty offerings: With work from home becoming such a major part of everyone’s lives, developers will now look to capitalise on this trend. New home decors will incorporate specially designed WFH spaces. One the other hand, commercial real estate is set to undergo an ever bigger transformation; growing beyond just ‘location’ and ‘value proposition’, the industry is now focussing on finer details such as ‘transparency’ and ‘customer experience’. Social distancing has led to a push for developing more and more contactless technology, hence, business models will now be backed by technological offerings which are tailor made for customers.
Post-COVID-19, there is going to be a change in how people think and live. The buyer sentiment will definitely be impacted. Job insecurity, reduced salaries, savings and business volumes have all disrupted cash flows to the real estate business. On the positive side, the real estate sector has been quick to respond to changes and adapt to new technologies; this is apparent in the digitisation of so many processes. With the democratisation of newer platforms and the offering of newer investment avenues, the Covid-19 pandemic has brought about massive shifts in investment preferences that will continue to outlive the pandemic.