In the aftermath of the second wave of Covid-19, Asia’s third-largest economy was reduced to becoming the epicentre of the global pandemic. This ruptured the real-estate market sentiment. Seeing the market condition, homebuyers had no option but to adopt the wait-and-watch approach. But thankfully experts are optimistic that despite the prevailing conditions, Indian Real Estate Residential Market is bound to bounce back with high consumer response immediately after the second wave is over.
Not merely in India, the Real-Estate Residential Market across the globe is marked to achieve exemplary growth during 2020-2021. Already the residential market in the USA, UK, Canada and Australia is witnessing historical growth across all segments. As per experts, post the second wave, in India too, the residential unit sales & new launches are envisaged to be higher than what was notched in 2020.
Residential Market in India During 1st wave
If we look at the scenario, post the first wave in 2020, the entire Realty Sector was heavily bogged down during the pandemic, and the rebound that happened in the third quarter was unexpected. The long stretch of lockdown witnessed the new trend of Work From Home, which facilitated the homebuyers to opt for bigger houses to accommodate their new lifestyle. Over and above this, the combination of other factors like low-interest rates, increased household savings, and regulatory support like stamp duty reduction & price correction, influenced sales to a great extent during this period.
Shift In Consumer Behavior Post Second Wave
With the number of Covid cases getting reduced with each passing day, the customer’s queries for new houses are increasing slowly but surely. Also, a shift in the consumer’s buying behaviour is noticeable. The need for a personal vehicle & personalized home is being increasingly felt. Consumers of the “Aspiring Class” are opting for bigger homes as they are now forced to spend more time with family. These distinguished buyers are aspiring for quality of life without compromising on luxury specifications.
The consumer trend of opting for compact housing has shifted to a complete Personalized Home Experience, which is “larger than life in terms of everything.” Customers are now beginning to veer towards multifunctional working spaces, with contemporary amenities and safety provisions, in a community living format at high-end locations. Looking at the trend, it is being projected that the maximum chunk of the potential buyers, post 2nd wave, would range between 1CR to 2.5CR in urban cities in India.
Post Wave 1 enhancement of customer demand, the new launches post Wave 2, have started increasing home space in the mid and upper segment, in line with changing customer expectations. Before the pandemic, young executives generally stayed in rental accommodations and saved money for the future. A major shift in perspective and preferences happened post-pandemic. The youngsters especially are now renouncing the option of rental accommodation and would rather opt for a ‘work from home space,’ that is conducive to their holistic well-being.
In other words, the pandemic experience has changed the mindset of customers. The young executives of e-commerce, IT, Pharma, Health care & automobile sector are opting for personalized vehicles and preferring to buy homes at high-end locations. Ever since healthcare has become the priority of life, people are trying their level best to get rid of public conveyance and choosing to sublet /rent houses to maintain zero tolerance on health and safety concerns.
Transformation In Living Style
The asset-class, real estate market in India, has evolved to provide ready-to-move semi luxury & luxury condominiums, which offer wholesome lifestyles, with the best in classy architecture and contemporary living conditions. DLF & Krisumi have brought in exemplary concepts in contemporary living style with modern amenities to create a unique Home Living Experience. Brands like Tata, Shobha, Godrej & Hiranandani are transforming the home living experience by initiating exciting living concepts, along with ultra-modern facilities and safety provisions, and creating numerous choices to live, work, entertain & play with fun. Leading players like DLF, Krisumi, Godrej & Oberoi Realty have transformed the products, in line with changing customer needs, in their new launches. The organized players’ strategy in restructuring the home concepts will facilitate increasing their market dominance exponentially post Wave -2.
Affordable Housing
If we analyze the pandemic data, during both the first and second waves, the majority of low-income group customers suffered from pay cuts and layoffs. Also, a big chunk of the population got infected in the pandemic. Even though the sentiment in this segment is a bit low, there is a huge chunk of demand in this segment. With the experience of the pandemic, people are in a rush to buy personalized homes. This segment of Real Estate is likely to come back early on track after a gestation period of 3-6 months, a post-second wave of the pandemic.
Concern For Transparency & Professionalism
Over the last few years, due to the credit crunch, many housing projects got stuck. Having burnt their fingers, the homebuyers faced vexatious and troublesome experiences at the hands of unorganized and conventional players in Real Estate. In the post-pandemic scenario, Real Estate will bring in a new trend in the business. Since the customer is highly concerned about Trust, Quality & Value for money, professionally managed companies will outperform in comparison to conventional players.
Companies run by professionals who understand the nuances of the business with transparency will be given more importance on the customer’s behalf. Companies who ‘Walk their Talk’ will win the race. With the new trend of ‘Big becoming bigger’, the small and non-professional players will struggle to sustain themselves in the post-pandemic era. The weak players will be taken over by professional organizations and trusted brands.
Increase In Buyers’ Consciousness
The emergence of the Real- Estate regulatory body, and its hyperactive propositions in educating homebuyers and solving their problems, has been commendable over few years. Homebuyers today are more vigilant, careful and matured in comparison to the past. Going forward, a customer-oriented approach, professional transparency & consumer-friendly corporate policies, would determine customer acquisition in Real-Estate business in years to come.
Rise In the Demand for Condominiums with Medical Care Facilities
‘Being in a controlled environment’ has been the talk during the pandemic. A large chunk of the population is opting for community living, with access to multifarious ultra-modern facilities & luxury living experiences. As a result, there is a huge rise in demand for townships where one can live, work and play with high-end healthcare facilities.
Shift In Consumer Segment
Today 80% of homebuyers are end-users, out of which the majority of buyers are first-time buyers. The penetration of investors in the residential segment is highly negligible. This trend in Real Estate in India has brought about a complete changeover in the buying behaviour of the customers. Since social distancing has been the prime concern during the pandemic, a segment of homebuyers is opting for self-owned independent homes, villas, or raw houses in convenient locations. Smaller plots, in the range of 1500- 2000ft, are going to create a high potential for sales across urban and semi-urban locations.
Digital Adoption
Despite no site visits and no physical interaction during the lockdown, major Real Estate players and brokers have swiftly adopted digital technologies, to launch new projects and connect with customers. This has transformed the trend of conventional interaction and resulted in a fair amount of success during both the pandemic waves. Digital adoption also created a positive impact in connecting and mobilizing young homebuyers in the IT, ITES & e-commerce sectors.
The use of digital technology will help home sellers in facilitating high growth by analyzing consumer trends through social listening, social insight, customer satisfaction index & CSAT. The use of machine learning and conversational AI applications will increase digital interaction with a high degree of transparency and reliability in this sector.
Customer Experience
The World today has drastically changed. Consumerism or buying habits have been transformed with the outbreak of Covid-19. Digital dependency, online accessibility of information & digital transparency has increased customer confidence in the online buying experience. In this sphere, Real Estate players need to initiate Digital Customer Experience to facilitate business growth. Customer journey, mapping, analysis of customer feedback, and strengthening critical touch points in customers’ journey would greatly help business the in long run. If we refer to consumer analytics in the residential segment, a major chunk of homebuyers, during the pandemic, are young corporate executives and entrepreneurs who are concerned about trust, quality and commitment.
Surprisingly the investor-driven market has turned into an end-user market. Conventional selling techniques are no more effective today. Only Process driven transparent corporate policies can help the conversion happen. During this time unorganized players must transform their approach and adopt professionalism to thrive in business!
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