The real estate industry is slowly discovering its feet after being battered by the pandemic. While it disrupted the market for some time, the industry bounced back quickly with an unprecedented jump in residential demand. The signs of such a bounce-back were evident when November 2020 recorded the highest number of residential registrations in almost a decade in Maharashtra.
As per the Knight Frank report the total value of all apartments sold in 2020 was estimated to be around 1.1 lakh crore, surpassing the 2019-mark of 90,769 crores. In January 2021, apartments worth Rs. 10,171 crores were sold.
With such a stellar initial report card, it’s estimated that good days lie ahead for the real estate business! So, here’s a home buying guide that evaluates some emerging trends that will shape the real estate business this year and what buyers can expect in the rest of 2021.
1 Flat growth in property prices
Over the last 4 to 5 years, property prices have witnessed subdued growth. The prevailing conditions too are likely to keep the growth in check. At the same time, homebuyers should not expect any rise as well as a fall in the prices. In 2021, property prices are likely to remain flat. So, if you’re sitting on the fence and still figuring out the right time to invest in a property – you cannot get a better time than 2021!
2 Interest rates to continue remaining low
With the recent reduction in the home loan rates by Kotak Mahindra Bank to 6.65 percent per annum, other banks soon followed suit! In fact – the State Bank of India reduced its home loan interest rates to 6.70 per cent for loans up to Rs 75 lakh and 6.75 per cent for loans above Rs 75 lakh to Rs 5 crore! These figures show that the interest rates are likely to hover at the sub-7 percent annual interest level for most of 2021. Thus, this is an excellent time for buyers to benefit from such low-interest rates.
3 Increasing importance to homeownership
The pandemic has made people realize the importance of homeownership and has changed the attitude of many who preferred rental homes. Especially as work from home has become the new normal for most office-goers, the pandemic is driving back the want to own a home.
There is also an expanding propensity to move away from the populated cities towards more moderate peripheral areas and towns. As a result, satellite towns such as Thane have attracted rising attention from home buyers, especially millennials!
This is because Thane has become a vast network of residential gated communities as well as commercial spaces that place everything within reach of nuclear families. Moreover, gated communities tend to be at an advantage as compared to single buildings as they tend to offer a host of amenities that raise the lifestyle of many millennials. Thus, 2021 will be the year where we witness the rising importance of homeownership.
4 Changes in workspace and demand for large, spacious homes
Numerous companies have adopted the WFH model seamlessly, which has resulted in the need for people to live in spacious homes. Along with large homes, developers need to offer numerous amenities for a healthy lifestyle, as it is a key criterion to pick projects. Homebuyers now look for integration of personal mobility, housekeeping, wellness, landscaped gardens, jogging tracks and numerous concierge services. Most developers have already started incorporating such facilities along with quality living spaces.
In 2021, we can expect the demand for bigger homes with dedicated spaces to create a home office along with facilities that enable a healthy lifestyle for people to fulfil the crux of homebuyers demands. More so, it is also about providing not just value-for-money but also delivering projects on time. Such residences that provide holistic living and unique amenities in strategic locations, would become the epitome of ideal homes.
5 Shift from prominent city centers to Tier 2 and 3 cities
The rise of work from home culture has resulted in an increased demand for homes away from the pollution of the metro cities. In this new normal where people can work from anywhere, many professionals now look to buy property beyond popular tier 1 cities.
This is because tier 2 and tier 3 cities offer reasonable prices as well as a lifestyle away from the commotion of the metros. This trend of reverse migration is predicted to write a story of growth, heightened economic activity and employment opportunities in tier 2 and tier 3 cities.
6 Ready to move-in homes are the in-trend
Instead of under-construction projects, many home buyers now prefer to purchase a ready-to-move-in property. Gone are the days when one needed to patiently wait long years as projects kept being delayed for possession! Buyers have now realized the value of ready possession homes as they offer the chance to look at the actual build quality of homes, greater tax benefits, and quick freedom from paying rent.
7 Reputed developers will be preferred over others.
The pandemic has dented the business, affecting the image of several small and mid-size developers. This may also result in the consolidation of smaller companies in the real estate segment. However, established brands such as the Ashwin Sheth Group are bound to expand their footprints and continue providing the best in class when it comes to residential properties. Homebuyers too are bound to prefer top-grade properties developed by well established and reputed developers.
Even though 2020 has been challenging, the real estate sector has the potential to be the key driver of economic growth in the country. With numerous impetus from the government and increasing demand for homes – the residential market is poised to have a good set of numbers for the coming months.