As per recent reports, 2022 may prove to be a more stable year for the sector for both commercial as well as residential sectors.
After a free fall in home sales and new launches, offtake of residential units has bounced back since early 2021. Demand for housing units has grown stronger. In Q4 for instance, sales of residential units peaked at 46,750 units in the country’s top seven markets—Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai, Hyderabad, and Kolkata. That was 114 percent and 40 percent higher year-on-year and quarter-on-quarter, respectively, making it the best quarter for home sales in over eight years.
One of the key factors that had encouraged homebuyers is affordability. Purchase affordability is now at a historic low across Indian cities. One of the primary reasons is the decrease in the ratio of EMIs to household income in the country’s leading housing markets—Mumbai, Delhi-NCR, and Bengaluru- from 97 percent in 2014 and 68 percent in 2019, it stood at 53 percent in 2021 in the country’s largest market Mumbai. For Delhi-NCR, it now stands at 28 percent from 35 percent in 2018 and 70 percent in 2012.
Technology has proven to be an enabler for the Real estate sector to recover, revive and reform. Real estate players- big or small- have clearly understood the significance of technology and the kind of innovation it can bring to the table in situations of uncertainty. Even the government has addressed its importance and has brought in various schemes to promote technology in the real estate sector.
The real estate industry reinvented itself by adopting technology to boost sales and improved construction quality. If a customer wasn’t paying a visit to a site, some of the larger players, viz.
, Shapoorji Pallonji Real Estateand Purvankara in Bangalore brought their projects right to the living room of the potential buyer, through online bookings, zoom calls, and virtual experience centers to clock sales in a sluggish market. In fact, Mahindra Lifespaces sold a staggering 300 homes using technology in the Q3, FY’21. The Ministry of Housing and Urban Affairs with the National
Real Estate Development Council also launched an e-commerce portal on which the developers will offer their ready-to-move homes for digital sales.
The industry began to adopt innovative processes that digitized traditional ones, enabling the realtor to analyze more data, be accessible online and in real-time, while in this context, the Government extended the Digital India Land Records Modernization Program (DILRMP) up to 2020 -21 for building upon the common features existing in land records in different states and developing an Integrated Land Information Management System (ILIMS) across India.
Technology has added wings across industries and real estate is one of them. The immersion of tech in the real estate sector has accelerated the growth exponentially and it will continue to do so. While the real estate sector is in the nascent stages of a mammoth tech shift, there has been considerable support from the Union Government to keep the sector relevant as well.
Building resilience through technology should be the name of the game for developers this year and in the years to come. While there is no script or formula that can help developers handle uncertainty or crisis, relying on tech can help developers face major fallouts. The future will be a harbinger of growth, innovation, and investment for the residential real estate sector.
The writer is Managing Director, Sell.do.