Upcoming Trends That Will Impact The Real Estate Sector

Upcoming Trends That Will Impact The Real Estate Sector

The global pandemic has left everyone whether it be the public sector or the health sector in adverse situations. Coronavirus strain has led to the shortage of labourers at the construction sites which led to a temporary halt in the construction activities and ultimately affected the real estate business. Real estate was already struggling with multiple issues like liquidity constraints and all. Top of that decline in the residential supply worsened the situation.

Buyers were reluctant to park their money and deferred from their decision of home buying for several months. No one has realized the importance and value of owning a home. Hence they are now observing a surge in inquiries and an increase in e-commerce too. The real estate sector that was battered by the pandemic has now started to find its feet. Residential sales are now reaching close to pre-covid levels but buoyed by the combination of factors such as low-interest rates, increased household savings, etc. With some changes in the economy and a complete overhaul in the economy, the real estate sector might emerge with new trends. We have seen the sizes of houses reducing in the past few years that lead to the trend of compact houses. However, this trend might get a revert in the upcoming years as people are moving towards a new lifestyle.

Growing Demand For Outdoor Activities:

Because of the Covid-19 pandemic, people are spending more time at home that is what makes the outside amenities. They are opting for parks, gardening areas, open terraces, personal space for offices, and others for their convenience. Moreover, builders are also taking this as one of the serious concerns to meet the need of new-age buyers with greater convenience of open space features.

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Scope For Experienced Agents

Almost 50% of the transactions are facilitated by inexperienced part-time agents. Since clients are getting more serious and concerned at every step, the average will not be enough. People will prefer more experience agents that can deliver them the best results. As such, we will see that part-time agents might get to do fewer transactions whereas high-performing agents continue to organize teams that can facilitate a much larger share of overall transactions.

The rise in Interest Rates

Due to a whole economy shattering down, many experts believe that the largest impact on real estate will be created because of rising interests soon. At some point, reality would take over and we will go back to more historic interest rates. It is quite difficult for the banks to continue lending at 2% interest. Hence home buyers will have a harder time securing the interest rates and home financing.

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Rise in Affordable Residences:

Over the few years, the affordable housing sector has seen a consistent push through government initiatives. And we know that a considerable part of our workforce is in the organized sectors which go from Tier II and Tier III towns. The major proportions of these people are forced to leave their rented apartments and for the settlements in Tier I cities and go back to their hometowns. Now that is what going to increase the demand, especially in Tier II and Tier III areas. Aso many schemes like Pradhan Mantri Awas Yojna Urban (PMAY-U) are also being implemented to push affordable housing and make it lucrative for the builders. Huge incentives are provided to the developers in the same segment that includes subsidies, tax and benefits, and institutional funding. These standardizations of the definition of affordable housing have paved the way towards healthy investment in the sector.

The demand for Houses Near Workplace:

Remote working trend is something that is here to stay. Even if the pandemic loosens its grip some companies will explore a new version in work-from-home culture for their employees. Whereas commuting will no longer be an issue for rhos who are working from home, it will later reduce the need to buy a house close to the workplace. As a result of which, people are going to be more open towards shifting to the peripheral location for the search of affordability. That will result in the demand for spacious homes which will also go up in the outskirts. One can say that this is the right time to invest in real estate since developers are offering properties at a lower rate that can drive sales and clear unsold inventories.

Though the real estate market has suffered a lot in the pandemic, three are still green shoots of recovery which are visible since the past few months improving the overall sentiments. Also, there are chances of high homes frim the budget of 2021-2022 that shall focus on the recovery of the economic sector.

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Availability of Inventory:

As there are many options today in terms of close-to-complete buildings and ready-to-move-in apartments. That eliminates all forms of market risks. Hence, it is proved to be a secured choice. Now further moving on, the pricing of these types of properties are marginally different from those under construction. Therefore, while the second wave signals another impending slip in real estate there will be a recovery that is aided through digitalization. Property buyers and dealers have adapted to online modes of communication and research all through the last year, Hence the digitalization of property inquires the need for a negotiation process. Moreover, these processes and inquiries help in keeping the real estate market afloat until the lockdown all over the country is eased.

Covid-19 has impacted the real estate market a lot that lead to delay in the key property deals. While there were signs of having a significant revival of property in the first quarter of 2021, we are observing a momentary halt that is in the upward trajectory which means that we are likely to observe more truncated housing sales with delayed development projects in the coming months.