As we all know, the Covid-19 pandemic has defied practically every economic forecast since its inception. Stores, restaurants, and workplaces were pretty empty after March 2020. The stock market crashed, and jobs were swiftly lost. However, everyone expected a protracted and terrible economic depression not to occur. The economy and real estate industry recovered in record time. Output is even higher as compared to the pre-pandemic – and jobs have started returning to pre-Covid levels by early 2022.
The real estate market might appear relatively unchanged since the pandemic to many audiences, but it’s not. Some marketplaces and industries may have irreversibly transformed. Some buildings and other assets have become outmoded, and property managers must now consider how they might be reused. Supply chain bottlenecks that hinder or halt manufacturing are another economic barrier – fears of inflation are exacerbated by labor and goods shortages.
So what can we anticipate now? The virus has played a significant role in this. Many cancelled their trip plans and were hesitant to dine inside a restaurant or go to the movies uncovered. Employees postponed their return-to-work plans. Businesses have ensured the flexibility and the ability to adjust swiftly to market developments.
If they can have it – they want that luxury lifestyle.” They want walkable amenities and open areas to live fuller lives without getting into a car and shifting from one part of their life to the other.
Here we list the key trend across the markets to watch out for, in 2022!
1- Digital property experience on the rise.
Pandemic is one of the key factors for “digital transformation”. India was steadily marching toward the technological changes & was steadily accepting the digital life, but the pandemic rushed in and propelled its applications.
The apartments or suites that we never used to finalize before a physical visit are now all virtual; you get to have a 3D tour of your apartment or office – tap in, zoom in, choose from a variety of options, and even look out for a sample architecture. All this at your fingertips!
Metaverse too made more sense for the real estate industry — where even the consumers’ Avtar could visit and take a look and feel of the place before making the decision.In foreign countries, digital property purchases have been on a rise. Even BFSI has fully digitalized its processes; from the application for the loan to getting it approved and getting e-verification in one go.
2- The transition from cities to outskirts
Post-Covid, people have started moving from tiny houses in cities to spacious houses in the same affordable range on the outskirts, thanks to the work from home culture. Some people moved out of city houses and settled back in their hometowns. However, The metro cities like Mumbai, Delhi, Pune, Bangalore, and Hyderabad are likely to rebound once the country is firmly on the other side of the pandemic.
Also, many people live and can live pretty much anywhere and tackle their jobs remotely. Probably this holds more ground today as broadband accessibility has quietly and inexorably pushed further into rural areas. Smaller cities and towns offer a much lower cost of living.
However, schools, hospitals, and other facilities, as well as the amenities, would make one want to live in the cities. But as soon as the shift appears to be on track, the other benefits would follow.
3- Property prices aim to shoot higher
Due to the increased demand for single-family homes and dwindling supply, prices for single-family homes shot up during the Covid-19 pandemic and are expected to remain high in the coming two years. During the first wave of the pandemic, the housing market temporarily reversed its course as prices dropped, and those looking to sell their homes reevaluated that decision.
The price increase is roughly 10 percent, which is unavoidable given growing inflationary tendencies in primary building raw commodities such as cement, steel, and even labor expenses. A few developers have already begun to raise prices, and it will only be a matter of time until most developers follow suit. Developers’ total operating costs have increased in recent months due to many of them providing on-site safety standards and taking care of their workers’ vaccines and other medical needs.
Furthermore, several developers had their stock cleared last year (among offers and discounts) following the pandemic’s rise in home demand, allowing them the ability to raise prices.
4- Combining co-working spaces with residential projects
The smartest thing real estate entities did was combine residential projects with co-working spaces. Many developers are considering the feasibility of including co-working spaces in their residential projects to correspond with the new WFH reality, despite various changing dynamics in Indian real estate. There are at least two options: retrofitting co-working areas into existing clubhouses and designing such a component into new developments from the start.
5- Amenities to level up the sales
Property owners, builders, and even landlords are seeking to capitalize on amenities to attract new tenants. It seems that the universal gym and parking access are no longer of critical importance as they are expected of most properties. Although parking too has been an expensive amenity. Property owners, these days, are looking into offering unique amenities like communal gardens and movie theaters, among many others.
Investors’ push to provide amenities signifies the need to identify amenities that could add value to their properties. But only focusing on amenities and not the construction quality will be a letdown for the builders. They should thus revisit their marketing strategies as amenities alone cannot attract tenants.
Many experts say that many companies can disappear without proper technological changes in the real estate industry. So, it is crucial to know the current real estate technology trends and implement them in your business. Single-family housing prices are projected to remain high and supply-constrained as more individuals migrate to the suburbs and try to buy a house. Low mortgage rates will continue to fuel housing demand.
Meanwhile, the rental property market in major cities will continue to decrease, creating chances for real estate investors anticipating a post-pandemic resurgence of city life. A rise in mortgage rates and an increase in house supply as development catches up with demand are signs of their reversal. It will be intriguing to observe which of these patterns were attributable to Covid-19 and which were not. Or are they actual long-term trends that are likely to last?