The residential market in India is witnessing a rebound post the covid-19 pandemic shock. The spike in spillover demand has led to the development of new locations in metropolitan cities.
India is among the top ten price-appreciating housing markets globally and has witnessed a rebound since the festive season in the second half of 2021. Developers across regions witnessed better inventory utilization and geared up to launch new projects. Post-covid consumer sentiment has been upbeat, with prospective buyers realizing the importance of an owned apartment and seeking better living standards, thus increasing demand in the sector.
The Changing Dynamics
The urban housing demand is driven by the millennial customer segment that prefers comfortable living and finer amenities . With city centers and suburbs facing a colossal space crunch in recent years, developers are exploring extended suburbs and peripheral areas that can provide outstanding home experiences.
The pandemic has changed the residential sector's dynamics, with work from home and digitization as the new normal in the foreseen future. The transformation has led to the preference for digital and spacious homes where people can work and stay comfortably. The changing urban lifestyle with nuclear families and higher disposable income has pushed for a better lifestyle and resources accessible in close proximity.
To cater to these needs, developers incorporate social infrastructures like gymnasiums, landscaped gardens; children’s play areas, schools, hospitals, and malls in township projects. However, these amenities require larger land parcels, leading to the development of new locations on the city outskirts and tremendous suburban growth and vitality.
After a prolonged period of dip and consolidation, there has been an uptick in housing demand across various segments. Higher affordability and attractive pricing has helped seal many deals.
Few developers are paying keen attention to urban planning and community living. They ensure good construction quality to match international standards, which can withstand India's climatic conditions. They aim to provide comfortable living even in peripheries of cities like Mumbai, which has limited land parcels. The distinctive design and aesthetic architecture help the brand connect with its buyers ingeniously.
The post-pandemic era is also seeing an upsurge in the luxury apartment segment. A report by Anarock property consultant on luxury home space states that the first quarter of the calendar year 2022 (Q1CY2022) has seen renewed interest with the highest sales numbers and supply in the past three years.
The Landscape in Q1CY2022
Cities across India are upgrading the public transport infrastructure to help better intracity, intercity, and interstate connectivity accelerating the housing demand in peri-urban areas across India.
Mumbai Metropolitan Region (MMR) has been the frontrunner in new launches among the top seven cities. Infrastructural upgrades such as the extension of metro lines, coastal roads, national highways, and alternative travel modes like ferries and water taxis have led to the development of western suburbs like Kandivali and Thane in the central suburbs.
The Bengaluru housing market is witnessing massive traction with increasing urban connectivity with the upcoming metro lines. The marketplace saw tremendous traction in demand and supply, with 44% launches in mid-segment, and the affordable housing segment priced below INR 40 lakhs contributing second with 25% new launches.
The Chennai real estate market looks promising with rapid growth in urbanization and IT/ITES parks. The development has led to the construction of reasonably priced larger homes with swanky amenities in peripheral areas in the Southern and Western parts of Chennai.
The growth corridors offer immense job opportunities in various sectors like IT/ ITES and warehousing logistics, which has been a major factor of growing interest among homebuyers. Property prices in growth corridors are lower since land parcels are priced lower than city centers, leading to an uptick in demand. The noteworthy advantages have led to urbanization and the development of new locations across the country.
The Road Ahead
Real estate is an asset class known for stability. First-time homebuyers experience pride and contentment in having their own home. On the other side, second-home buyers and senior investors consider real estate as an investment avenue for safe and steady rental income for their post-retirement journeys.
Despite troughs and peaks, the real estate sector has eventually seen rising demand from different geographies and segments from affordable housing to luxury property. Developers need to take a cognizant approach while developing new locations to maintain an ecological balance for a sustainable future.