Without any doubt the real estate sector emerged as the most desired investment choice in 2021. Reason being the two waves of the COVID-19 pandemic and the consequent lockdowns. As a result, ‘Owning a Home’ became the strong buzzword in every conversation – in family, social, and professional circles. Despite being a challenging year in which the majority of lives and livelihood were at stake, economic growth tumbled down and job losses were very rampant across sectors, The real estate sector has experienced a strong recovery and is positively preparing for next year. The resilience of the sector against the last two waves of the pandemic gives hope that the sector will overcome the latest Omicron variants that are currently threatening the world.
As part of that, the real estate sector responded swiftly to creeping changes. With the skillful support of technology, this industry modified its approach to adapt the long vision and operations to evolving trends and customer preferences. The pandemic recession did not delay the spirit of the sector for a long time, and improvements in market and consumer sentiment showed a promising recovery.
The real estate sector has expanded its reach from metropolitan areas and sought potential opportunities in non-metropolitan and emerging regions, based on the promotion of the business environment. The promotion of large-scale infrastructure, low tax rates, recent trends, and government policy stimuli have helped drive the next wave of real estate growth in the country. Pandemic-related trends have taken advantage of the positive sentiment of these markets, coupled with low-interest rates, affordability, and other favorable factors. In addition, state capitals and metropolitan cities, Tiers 2 and 3, have emerged as strong growth drivers for the real estate sector.
Tier 2 cities such as Lucknow, Amritsar, New Chandigarh, Faridabad, Indore, and Ahmedabad have witnessed growing interest from real estate buyers and are emerging as promising real estate locations. Tier 2 and Tier 3 cities are attracting more and more potential buyers due to infrastructure development, well-planned connectivity, quality of life, and world-class social infrastructure. There is no doubt that these markets will continue to lead the growth of this sector beyond next year. The emotional feeling that homebuyers own their homes also brought these cities to the fore. Family relocation to central group housing estates is also a major driver of home sales in these cities. Larger living spaces and many open and lush spaces shaped the development of these cities.
The mood for buying a home was also very pronounced in the top eight cities. Home sales increased 92% in the July-September quarter, according to industry reports. The report also highlights a 21 percent increase in new home launches between July and September. Higher numbers indicate renewed consumer and investor confidence, which is enough encouragement for the market to maintain growth momentum next year. After the pandemic retail sector quickly adapted to new trends due to rising consumer demand and taste. New asset classes such as Hi-street and multipurpose commercial real estate have struck a chord with investors and consumers. The focus has shifted to a high-tech, modern, organized and secure shopping experience. With the rise of well-known brands and conscious consumers, demand for luxury shopping complexes, malls, entertainment centers, and high streets across the country is increasing. Perfectly capturing trends influenced by pandemics and evolving tastes, Hi-streets has emerged as the number one contributor to the growth of the commercial segment. Developers are strengthening their portfolios as more investors and retailers invest heavily in this commercial asset class.
Today, the Indian market is considered one of the favorite markets of various global brands. They are looking to the Indian market with aggressive expansion plans. Apart from malls and shopping centers, lifestyle changes, urbanization and 100% FDI in retail are key factors for the success of the High-street concept in India. These spaces generate better rental revenue and retailers are actively investing in this segment. Multipurpose development in urban areas of India, such as modern multi-storey car parks with multiple benefits, has the potential to beautify the landscape of urban infrastructure. This segment is another emerging asset class that is likely to be central next year.
With its significant contribution to the Indian economy, the real estate sector will be a strong pillar in the coming years to support India's dream of becoming a $ 5 trillion economy. Huge investments in public-private partnerships (PPPs) in infrastructure will help double the economic potential of the country. As positive sentiment continues to grow, this sector will be the next big thing in India's economic growth.