Kanika Gupta Shori, COO and Co-Founder at Square Yards, has highlighted some emerging trends that will shape the performance of the real estate industry in 2021. The residential segment performed well in Q3 and Q4 of CY2020 with sales figures improving strongly in this period. She feels that 80% of prospective buyers will buy homes within a year while 65% of buyers still prefer ready to move in properties. Demand drivers include the ease of buying a home online, discounts, lower interest rates and flexible payment plans among others. Home buyer confidence is still high and so is overall ownership sentiment. Tax benefits have been extended for affordable rental housing ventures and affordable housing alike while the RBI has kept the repo rates stable. Buyer traffic should remain strong in 2021 with demand witnessing a slight shift towards lower-density markets. Stamp duty cuts in Delhi-NCR, Karnataka and Mumbai have also been a major push towards increased housing sales in recent times.
Shori feels that the proptech players will be innovating and evolving faster in line with changing industry trends. Developers have now realized the sheer importance of proptech which helped them maintain business continuity amidst the pandemic and also because buyers are completely shifting towards online real estate platforms now. Proptech will keep enabling smarter experiences in buying and selling property, lease transactions and property management. This trend will keep gaining traction in 2021.
Housing demand should sustain, clearly indicated by growth of 51% in sales volumes (quarter on quarter) from Q3 to Q4 across India’s 7 major residential real estate markets. Affordable housing will keep garnering steady demand while affordable rental housing ventures will keep flourishing. More people will look to upgrade to bigger homes with more usable space, thereby keeping demand steady for luxury and mid-range properties as well.
Demand of buyers will keep consolidating in favor of organized, financially stable, reputed and leading real estate brands. They will keep gaining more market share owing to their quality projects and large-scale-execution capabilities. Smaller players will keep exiting the market owing to thinning margins, limited funding in the current scenario and shifting consumer preferences towards reputed property brands. The industry will keep getting more organized in 2021 while the premium real estate category will be increasingly highlighted as a result.
Majorly, real estate prices will not increase in 2021 as per Shori since unsold inventory continues to stand at a high 9.5 lakh units across India’s major 8 cities. This will require 2-3 years to reduce to more manageable levels. In spite of sales figures exceeding new property launches and economic recovery, prices will remain largely stable although some pockets may see a slight increase. Shori has also opined that remote working, reverse migration of professionals and growing aspirations for better lifestyles will fuel demand for housing throughout Tier-1 and Tier-2 cities in the country. People are looking for homes priced 30-40% lesser than homes in key metro cities. The 5-year outgo on rentals for those residing in metros will be almost similar to 30-50% of property costs in smaller cities. Many buyers will do the math and this will fuel the boom in property across satellite towns and cities.
On the whole, Kanika Gupta Shori feels that 2021 will be a better year for the residential real estate sector owing to better positivity, growth and higher investments.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.