The real estate sector contributes 6-7% to the GDP, apart from being a large employment generator. The health of this sector has a large bearing on the consumer sentiment.
Few of the challenges that face the sector is the ease of doing business factor, cost of funding, technology and data and rising input costs. Only those brands with a highly disciplined and strategic approach will be able to steer their businesses while facing these challenges.
The sector has shown much resilience and steady growth post pandemic. Buoyed by historically low interest rates and temporary stamp-duty waivers real estate is surely looking robust with a flurry of new launches lined up in 2022. A lot of consolidation is also underway in the sector where the bigger branded players are finding an edge over the smaller players.
The pandemic has left in its wake a lot of learnings and outcomes. We have learnt only one thing is certain - that is uncertainty. In short, VUCA (Volatility, Uncertainty, Complexity and Ambiguity) is inherent to the thriving sector.
Post pandemic employment market is abuzz and talent pools are seeing their incomes rise disproportionately. With more purchasing power, customers are investing more in real estate considering it to be a stable asset.
Housing is a key input in economic, social, and civic development of any country. India being a vast and diverse country faces a challenge of an inclusive growth as real estate in India is a prima facie private enterprise. To drive the inclusive growth, authorities will need to take more proactive steps along with the private sector to fuel the growth of affordable housing. The rising input costs and narrowing profit margins in the sector make the affordable segment less lucrative and hence the segment is seeing a poor initiative.
The supply side factors like steel, cement and other construction materials are oscillating between increasing demands and capital deployment. Production capacities are also facing the heat of rising demand. We need better planning and efficient project management. Pre-procurement of materials would help during the time of global crisis. Forecasting of any such contingency and preparing for the same would reduce the losses in an effective way.
The new age has given rise to the millennial consumerism. They are impulse buyers and seek instant gratification and fulfilment. As a result, we must work towards designing versatile homes and office spaces as well as focus on the customer experience, which is the real deciding factor today.
The consumer mind-set has changed considerably. They value, now more than ever, the feeling of being part of a community, based on meaningful social interaction that can give a sense of commitment and belongingness.
Retirement or second home demand has jumped. Employees are opting out of lucrative corporate, burning-out, careers to a more slow and sustainable life. The lifestyle is no longer measured only the home interiors but also by how accessible the home is, and how much engagement-friendly the project is for the entire family.
Additionally introduction of Proptech in construction will enhance customer engagement and loyalty, improve speed of delivery and ensure delivery timelines are met. With increase in purchasing power, demand will continue to rise. VTP Realty is gearing up to not just rising demand, but to the rise of demanding customers. And we are very excited!
