Luxury Housing Uptick Expected To Continue In 2022
Digitalization and innovation have accelerated the housing market's adoption, and buyers now prefer homes featuring best-in-class amenities. A trend of residential projects, township developments, and large-sized homes emerged as a preferred choice developed during the recent pandemic and will likely continue. The coming year will likely be an impactful one for the real estate sector thanks to strong demand, evolving trends, and new emerging markets.
In 2021, the real estate sector experienced a wholesome rebound. As a result of the impressive performance and quick rejuvenation, the real estate sector gained back the trust of buyers and investors and further accelerated its growth momentum. According to Knight Frank's 'Real Estate Outlook 2022', India's real estate sector is expected to grow steadily in 2022.
Knowing the details and the hopes from coming year for the tremendous growth - 2022 is going to be a fantastic year.
- As per the Anarock report, new supplies for the residential sector increased by 27% between Jan and Sep 2021 compared to the same period in 2020, and sales increased by 5%.
- No matter how challenging and eventful the year has been, the real estate sector has seen a strong rebound, according to Mohit Goel, MD, Omaxe Ltd. Boosted by the strong economy, real estate gains quickly gained momentum.
- The Managing Director of Krisumi Corporation shared an explanation of the trends and customer preferences, saying, "Work from home is emerging as the dominant undercurrent to shape the preferences of homebuyers in 2022. The city's periphery will remain the most sought-after region and flexible work options will continue to shape the housing market in innovative ways."
- As Vivek Singhal, CEO, Smartworld Developers, explains, "the virus has refurbished the real estate market, and developers now prioritize individuality and customer-centricity as their top concerns. Innovation and digital transformation will drive the bang in the real estate market over the next year. The period of 2021 has given rise to an asset class of independent floors in gated communities, and we expect this trend to continue."
High-end property deals are nothing more than numbers to the ultra-rich, particularly for homes costing between Rs 80 crores and Rs 1,000 crores. Despite the pandemic, Delhi continued to epitomize this syndrome in 2021 with industrialists piling into super luxury bungalows. Property experts predict that the trend will persist in 2022, as well. The most amazing trend and rise has been witnessed in Delhi and Mumbai with people focusing majorly on luxurious properties.
- Maharashtra's government decided not to extend the stamp duty waiver on March 31, the day several transactions were recorded in the Mumbai market. Despite this, buyers of luxury ready-to-move-in properties have continued to buy them from industrialists to diamond merchants until the end of the year.
- As well as in Delhi's Lutyens' zone and other luxury markets such as West End and Vasant Vihar, several bungalow sales were completed. Two branded players have recently announced plans to enter this segment - Godrej Properties and Tata Realty and Infrastructure.
- Godrej Properties said it has entered into a joint venture with the TDI group to construct a luxury housing project in Connaught Place and Tata Realty and Infrastructure plans to develop the project near Hailey Road. By 2023, Tata Realty and Infrastructure intends to invest close to Rs 200 crore in the project.
- During both waves of the pandemic, experts say, Mumbai saw an increase in demand for independent houses in the ultra-luxury segment, particularly above the Rs 100 crore levels. According to Ritesh Mehta, Head Residential Property Sales at JLL, the limited availability of such bungalows will result in decent appreciation over a period of three to five years.
- K Raheja Corp, the Mumbai-based developer of the 60,000-square-foot project, kept possession of three floors in one of India's biggest high-rise deals. ft and worth Rs 426 crore. In Worli, the 45-story Artesia tower, an iconic landmark with views of the Arabian Sea and the Bandra Worli Sea Link, stands as an iconic standalone tower.
"In addition to bungalows, there is enormous demand for Jodi’s or houses consisting of four units that are purchased by one family. People want to be with their friends and family during this time. Prior to now, they bought luxury apartments in different developments, but now they are buying apartments on the same floor. Therefore, it should come as no surprise that a tower with 180 units has no more than 100 families," he says.
According to Mehta, demand for the few and far between ready-to-move-in luxury homes that exist today is expected to continue through 2022. Industrialists, companies, stockbrokers, and IPO investors are among the segments selecting these units.
Phenomenal rise is expected in the coming years.
By 2025, the real estate market is expected to contribute 13 percent to the GDP, according to a report released in August by the Indian Real Estate Industry. In addition, the report estimates that market size will increase to $9.30 billion (roughly Rs 65,000 crore) by 2040. Similarly, the real estate sector is one of the top 3 FDI-producing sectors, the 2nd largest employment-creating sector, and the third-largest sector that drives economic growth, based on the Department of Promotion of Industry and Internal Trade Policy's (DPIIT) statistics. An estimated $2.5 billion in cross-border real estate investments is expected in India in 2022, according to research conducted by Knight Frank.
The residential real estate market is expected to rise by up to 5% next year, according to industry reports. JLL predicts that institutional investments in Indian real estate will rebound in 2022 driven by low-interest rates, ongoing monetary stimulus, and enhanced revenue visibility across asset classes, and supportive economic policies. In 2022, institutional investment in Indian real estate is expected to surpass $5 billion, which was experienced by the Indian real estate annually during the 2017-2020 timeframe. It is expected that India will become a 5-trillion-dollar economy by the end of the decade, and the real estate industry will surely play a large role in this development.
A year marred by the pandemic, 2021 was a phenomenal year in real estate. With changing attitudes towards health, sustainability, future security, and stable investments, housing demand soared. In this time of pandemic shocks, the residential sector adapted technology solutions quickly to maintain its business operations. Positive government policies, low tax regimes, low-interest rates for loans, diversified investments, and most importantly, real estate assets' recognition as a guarantee of a secure future, contributed to boosting consumer confidence and market sentiment. The residential real estate sector today has become a buyer-centric industry, and a bright future is expected for the sector in 2022.