The year 2022 was a year of remarkable recovery for the real estate sector with many notable trends. Torbit Realty presents 10 top trends that shaped real estate in 2022.
Affordable housing loses ground to mid-priced & premium housing
The mid-range (INR 40 – 80 lakh), premium (INR 80 lakh – INR 1.5 Cr), and luxury segments (>INR 1.5 Cr) were the showstoppers of 2022. In contrast, affordable housing had a lean time, with more buyers in this segment going into wait-and-watch mode; unsurprisingly, new supply in this category reduced markedly.As per Anarock data, in the pre-Covid year of 2019, affordable housing had the highest supply share with 40% of 2,36,560 units launched in the top 7 cities. In the first nine months of 2022, affordable housing supply reduced to 21% of approx. 2.65 lakh units launched in the top 7 cities during this period.
Joint developments as growth driver
There was surge in joint ventures/developments between distressed developers and financially strong A grade developers who gained supremacy in the market. End-users, mainly focused on projects by Grade A developers, who gained even more market share . About 60% of the 2.65 lakh units launched in the first three quarters of the year were by branded developers who also sold more than 55% of the 2.73 lakh units purchased in this period.
Rise of the suburbs and Tier2-3 cities
Peripheral locations led homebuyer demand in 2022. The walk-to-work concept, which involves compact homes around workplace hubs in expensive city centres, lost more traction.Most of the consumers preferred peripheral /suburban areas where they can buy bigger homes with better lifestyle amenities at lower prices. Only one third of the consumers , according to Anarock survey, preferred walk-to-work city centre locations and locations within city limits.
Firming up of property prices and rentals
Housing prices firmed up on account of increase in input costs and interest rates, increasing by an average of 5-7% in 2022. These price hikes were inevitable after relative stagnation for 2-3 years. Similarly, due to opening up of offices . rental market demand not only breached pre-pandemic levels but surpassed it, and many housing societies have few or no vacancies. Rentals rose 20-25% against pre-pandemic levels on average, with some of the more popular societies seeing more than 30% increase.
Pick up in plotted developments
Plotted developments were popular in 2022, especially in South Indian cities. Though the worst of the pandemic, which saw increased demand for independent living, is over, plots ruled the residential roost in Bengaluru, Chennai, and Hyderabad.Plot buyers have taken a futuristic investment perspective and are betting on the superior and safer long-term ROI of land over built-up properties. Many large developers catered to this demand in 2022.
Growing demand for green realty
The year 2022 saw rising demand for green real estate – both residental and commercial realty. Post- covid, the year saw increased demand for nature-friendly green homes from health and wellness conscious consumers. On the commercial office front too, both occupiers and corporates preferred Grade A green offices. Even the domestic and global funds allocated larger capital to developers of sustainable developments. As such real estate developers focused more on sustainability . As per CBRE , about one third of totlal office spaces in top 6 citiies are certified green buildings.
Rise of mixed-use real estate
The year saw the rise of mixed-use developments . The growing trend of shop-cum office buildings was witnessed this year, particularly in the NCR this trend was more dominant. Real estate developers also took to developments having a mix of retail , office, leissre & entertainment ( with multiplex, gaming zone, besides service apartments .
There was a growing focus on neighbourhood developments in 2022. Developers went in for neighbourhood/satellite offices in smaller towns due to remote work and to ensure cost savings and check business disruptions due to pandemic like situations. On the retail front , post-covid trend of convenience shopping marts within group housing societies gained momentum . The year which witnessed the return of mall magic , saw the trend of neighbourhood malls picking up.
Growing trend of flexible space
The year 2022 saw the growing trend of flexible space .Post- covid requirement for a larger space at home to accomodate home office and space for activities like workout and online classes, led to the demand for flexible homes. On the commercial front, flexible space was the biggest driver of office realty with its share set to double to 7msf by the year end.
Augmentation of alternate assets
For the alternate asset classes of real estate like cowork and co-living , logistics and warehousing, data centres, industrial real estate , it was a rewarding year. Leasing of warehousing space, according to Knightfrank rose to 62% to 51.3 msf in FY 22. Data Centre market recorded 16% rise to 637 MW in H1 2022. Cowork space , according to JLL, is estimated to grow to 50 msf and 750,000 sft by end 2022.