India’s real estate sector suffered a major setback during the first and the second wave of the COVID-19 pandemic but now it is showing signs of steady recovery.
Recently, Deloitte Touche Tohmatsu India LLP (Deloitte India) released a report, titled ‘Reality of realty in a post-COVID-19’, which captures the important trends that will pave way for the recovery of the sector. According to this survey-based report, the pandemic has triggered a change in consumer behaviour and that is one of the factors enabling this sector to bounce back.
The report highlights that even though the first wave had a far bearing impact on the residential real-estate, the sub-sector was quick to regain its balance. 74 per cent of respondents that participated in this survey expect that there will be an increase in demand for the residential sub-sector, of which, 86 per cent indicated a 10-20 per cent increase.
Aditya Kushwaha, CEO and Director, Axis Ecorp noted that “The real estate market is not ready to taper right now and will continue to move in a fast direction amid pent-up demand. Interest rates also have a major impact on the current boom. During these uncertain times, homebuyers are scouting for projects that are spacious, deploy sustainable materials and are giving preference to self-sustaining societies. They are expecting a better experience and long-term connection with their house. We believe that given the changing needs and aspirations of the people, the affordable housing and holiday home segment will continue to flourish in the coming few months”.
As people resorted to working from home during the pandemic, the commercial real estate sector was hampered in a big way. Now with the cases going down, the vaccination drives picking up, people returning to offices and organisations adapting to hybrid working models, the commercial real-estate sub-sector is expected to post healthy growth.
The survey also predicts that the demand for data centres will pick up in India. 88 per cent respondents believed that demand for data centre real estate, after COVID-19 will shoot up with “technology”, “innovation”, and “data” taking centre stage, owing to the digital narrative.
In addition to this, data privacy and data localisation policy reforms and initiatives by the government mandate India Inc to focus on local establishments. In the wake of this, 56 per cent of respondents believe that there be a spurt in demand for newer data centres.
“The effects of the pandemic have been far-reaching in all industries, but it seems clear that Covid-19 has fundamentally changed things in the commercial real estate space. Things are now beginning to get on track and we can see the segment growing in 2022. As far as the data centres go, in the past few years, there has been a flurry of investments in this segment which has been a result of a confluence of factors. The size of the data centre market in India is expected to touch $4 billion in the next 3-4 years. There is a lot of potential for growth in the data centre market in India and that is evident from the rising demand of Data centres and the sheer volume of cables that are being laid around the established hubs.”.
Commenting on the pace of transformation of the real-estate sector, Vijay KR, Partner Deloitte India, said, “The real estate sector has picked up from where it left off with increased interests from individual buyers in residential real estate, rapid expansion from GCCs looking to return to the office, and micro warehousing. With lower interest rates playing its part, along with government support, we are witnessing increased optimism in most sub-sectors.”
