By Rohit Poddar, Managing Director, Poddar Housing and Development Ltd
The COVID-19 pandemic has permanently changed habits that may affect demand for real estate. Consumers have shifted from spending high on non-essential goods and services to preserving essentials and making them last longer. What looked like a good year for the growth, 2020 has become a challenging year for every sector that contributes to the economy. The impact of COVID 19 bought the entire economy to a complete halt bringing in certain behavioural changes in consumer’s preferences.
Change in Investment Preferences:
People who preferred to rent the apartment and invest a major chunk of their money in the market to churn out huge returns are now finding ways of investing in something more secure owing to the loses on their long-term savings which were invested in SIPs and mutual funds. Also, the growing concern about security of the money saved in the banks has also resulted in a change of perception amongst the consumers.
This is because of misuse of power that few banks did over the course of few years. Banks today are in debt because of NPA’s and defaulters. Considering the current condition and the public perception, it is likely that people would now want to invest in something that is secured and less vulnerable to the market’s condition. This is where real estate will pick up the pace as the property purchased would be here to stay.
Attraction to rate changes and other facilities:
The consumers are attracted to the lowest Home Loan rates, reduction of Stamp Duty + best possible consumer benefits. The cut in the repo rate has made home loans cheaper and affordable. Demand for real estate saw a gradual increase in affordable housing along with mid-income housing. For the last two years the demand for both of these categories has been phenomenal which has made several luxury players to venture into affordable housing segment as it is the future of Real estate.
Demand by the NRIs:
The interest for lodging in metro urban communities is probably going to see an increase as NRIs are likely to return back to India. Growing job uncertainty in foreign countries and past recession experiences will strike a need of owning a house in the homeland. Since the NRI’s are used to maintaining a specific standard of living, considering the current scenario, a gradual increase in demand for homes in satellite areas and micro markets will be seen. Going forward the amenities will also be redefined, from hospitals to business centres, from open space to gated communities and township will see a huge demand.
Switch to Online:
The arrival of online home listings, which served as a meeting point for buyers and sellers was one of the first things that completely changed the way buyers approached the house-hunting process. This was then followed by property walkthroughs, virtual view of the property, etc. With this, prospective buyers could see multiple homes in a matter of minutes, from the comfort of their homes saving the travel time and effort invested in looking out for properties. In India, it will be difficult for buyers to completely trust the online process. Hence, narrowing down their options and then personally visiting them would be a feasible option for the buyers.
Online house hunting has now become a domain where consumers are finalizing the top 3 or top 5 of their preferred houses and later investing their time and effort in buying amongst that list.
Redesign of space with WFH in mind:
Relatively consumers prefer an improvement in house interiors or space design when more people work from home. People have become aware of saving more, spending less and investing smartly. Affordable housing was the game changer for real estate and it will take the centre stage post lockdown due to its value proposition. Walk to work model is expected to see a rise in the future.
