Like every other industry the COVID 19 pandemic affected the real estate industry too. For developers and buyers of luxury flats in Chennai, this seemed to be a period of uncertainty. However, despite the initial dip in business, the year 2021 has shown great progress, which will continue into 2022 as well, if current trends keep up.
Real Estate Highlights of 2021:
- Adoption of digital technologies in the real estate sector has pushed the industry forward by 10 years.
- There is control on price hikes, as developers want to keep the inventory affordable even when resource costs have risen. Unrestricted price hikes will bring the demand down again. In fact, between 2020 and 2021, property prices have only risen by 3%.
- More investment from end-users rather than those investing in additional properties. When the buyer is the end-user, their expectations are precise and developers are taking expert and consumer input to fulfil them.
- Large houses are back in demand. The Work from home culture has spurred the need for more space at home. Children and adults need dedicated spaces to work, study, and unwind. This prompted people to invest in larger luxury flats in Chennai. Developers are now focussing on constructing apartments that are 26% larger than their previous stock. Over 65% of the supply in 2021 was from this segment.
- Increase in demand for other types of properties like plots, villas, villaments, etc. Developers are venturing into the non-apartment segment by promoting plots for sale.
- People who were existing consumers of properties like luxury flats in Chennai, continued to invest in them. They capitalised on the slow-moving stock, developer discounts, and the moratoriums and concessions offered by the government and lenders during the pandemic.
- Increased demand for luxury amenities, as the pandemic forced them to seek entertainment and relaxation within the safety of home.
- Increase in real estate projects in the suburbs by over 60%, as people opted for the peaceful ambiance and low property rates offered by the peripheral locations.
- International investors are interested in the Indian real estate market. Goldman Sachs is expected to bring in investments to the tune of 2-3 Billion USD.
- The S&P BSE Realty Index rose to 4028 as of Mid December, 2021 from 2501 in Mid January of 2021.
- Overall, the real estate business stood to reap profits in 2021 despite two consecutive waves of COVID. This positive movement is expected to continue into 2022.
Projections for Real estate industry in 2022:
- With the industry nearly back on its feet, we can expect interest rates of home loans to increase again.
- This year may see the adoption of advanced digital technology to create an immersive customer experience. This will prove useful in helping them envision the completed appearance of newly launched and under construction properties.
- Property rates will appreciate anywhere from 55 to 10%.
- Developers who showed adaptability and are organised in their marketing strategies will capture more market shares from smaller players in the industry.
- Luxury flats in Chennai and mid-range home segment will continue to be the properties of choice with all ranges of consumers. The demand for the same will be sustained for the foreseeable future as the pandemic continues to keep people at home.
- Increased Private Equity investments in Indian real estate. Their share will shoot up to at least 22%. This is a significant rise from last year’s 14%.
- Homebuyers will expect modern amenities like home automation, flexible and convertible spaces, open floor plans, sustainable construction practices, etc.
- Developers may be forced to pass on the burden of increasing raw material and labour costs to the buyers.
- The demand will shift to under construction projects as most developers depleted their ready-to-move-in stock during the initial phases of the pandemic.
Lifestyle Housing is a reputed developer of apartments in Chennai. We offer affordable luxury and mid segment homes that are equipped with premium amenities. Located in prominent residential and commercial zones in Chennai, the homes are perfect for end-users and to rent out with guaranteed return on investment.
