The pandemic has brought uncountable hardships and havoc, the housing market has recovered better than most other segments due to low mortgage rates and a shift from urban to suburban lifestyles. After the first lockdown, people realized the benefits of owning a home; therefore the second wave of COVID-19 had little impact on the industry. By supporting construction workers in being vaccinated as soon as possible, it boosted construction conversation. The vaccination campaign is likely to be expedited even more, lowering the risk factor. Vaccines' broader reach ensured better management and increased construction activity, which benefited realtors.
Following the reduction in stamp duty announced last year, Mumbai saw a sharp uptick in sales. In terms of costs, the Mumbai Metropolitan Region (MMR) has seen a 17 percent decrease in the last five years. In FY22, prices are predicted to remain constant, with an upward bias in some areas. According to Knight Frank India's "India Buyer Survey 2021," upgrading one's personal residence emerged as the major reason for Indian homebuyers to purchase a new house this year, despite the covid-19 pandemic.
The pandemic has altered people's perceptions about home ownership. In the last few months, two global trends have emerged. To begin with, some buyers are becoming more ambivalent about location; if they can get a co-primary property that provides the lifestyle and fun they believe they have been missing out on. Second, buyers are taking a more defensive position due to low savings rates and exuberant stock markets, rebalancing their portfolios with a greater concentration on tangible assets such as property.
The uncertainty the pandemic has brought has led and motivated people to invest in safe haven assets. There are a number of reasons why the real estate segment will witness consistent rise in the future, due to which there will be an increase in price as well.
Millennials driving demand for residential property
Real estate has seen this shift from functional residences to high value properties to match the demands of the new customer base that is young, successful, willing to pay and with high standards in quality and comfort. Today's youth believe in planning at every stage of their lives -Luxury housing is inspiring to today's youth, and they want to live in a home with all of the latest conveniences. This segment has been essential in generating demand for premium luxury housing, and it is expected to continue to do so in the future. The key factors for this surge can be attributed to the lifestyle changing factors as well as positive externalities created by the steps taken by the policy makers.
Premium housing comes with improved facilities and security. Because of its high level of sanitization and hygiene management, this type of housing not only provides better security against theft, but it may also protect people from infections and viruses. In the future, this will be a major demand driver. People have also come to terms with the Work-from-home concept. Homes have become the make shift offices of mostly everyone in the country. Thus leverage of space is required along with entertainment and refreshment options being an essential criterion of ones' home-buying preferences.
Another essential component of luxury and premium is the return on investment it provides. The rise in real estate prices is unavoidable. Demand-supply imbalances are one of the most significant causes of price increases. Demand has been steadily increasing, while supply has been extremely constrained.
Ultimately, every Indian wishes to buy their own home. With the outbreak of the pandemic, that desire has grown even stronger. People who have been debating whether or not to buy will continue to fuel total housing demand in the coming years.
About the author
Ram Raheja, the author of the article is the Director and Head-Director & Design at S Raheja Realty and is the third generation developer from the family. Under his aegis, the group has seen new horizons and in terms of growth through new projects, completions and a modernized approach with traditional values. He has pursued Architecture at SAIC - The School of the Art Institute of Chicago and was awarded a Merit Scholarship by SAIC in 2008. Before joining the family business, Ram has worked with Ricardo Bofill Taller De Architecture in Barcelona, Spain. His work has been showcased at several design exhibitions globally including the Sullivan Gallery's in Chicago and Ashai Art Square at Tokyo, Platform-1 in Beppu, Japan to name a few.