How real estate players are tweaking their businesses to adjust to the new normal

‘In adversity lies opportunity’, this is an adage that came true for residential real estate especially in the second half of 2020. Many home seekers witnessed a ‘never before-never again’ scenario which was a win-win in more ways than one. For developers, the first challenge in 2021 is maintaining the growth rates which residential sales clocked in the second half 2020. As the economy opened up with ‘Mission Unlock’ through the H2 2020, commercial real estate also witnessed some green shoots through 2020. These are positive trends and as we move into 2021, for real estate players the thought is ‘optimism’, the goal is ‘growth’ – and the business model is in sync with the new paradigm.

Effectively, 2021 for all segments of the economy, including real estate, will be the year of resurgence – when ghosts of the past will be laid to rest and growth will happen under the new paradigm – a year when the vaccine will bring us back to near-normalcy. With the positives of economic, taxation and industry reforms; as also having adapted to the ‘new normal’, real estate expects growth trends to continue through the next decade. Expected to reach volumes of US$ 1 trillion by 2030; 2025 should see Indian real estate contribute almost 15 per cent of the country’s GDP. It will continue to create jobs and provide necessary impetus to the Indian economy.

The regime of low interest rates for home loans will continue through 2021, it will create a positive environment for home buying. States like Maharashtra have offered stamp duty reduction in 2020, a lower rate of reduction in 2021 will still create positive sentiment as opposed to full stamp duty payment. Real estate developers will work in sync with these factors, even as buying a ‘home, back home’ for NRIs will continue to grow through 2021. Indian real estate will ensure a positive environment for this segment of home buyers.

The new age home buyer’s requirements will continue to take center-stage through 2021, with developers focusing on features that enhance home automation in the new design which embeds technology-plus lifestyles. So, FTTP server for interrupted internet supply, power back-up generator set, and smart security spaces/ car parking spaces will continue in importance.

Trends that took center-stage through 2020 and will continue in 2021 include residential realty reflecting demand for extra flexi space to accommodate the new normal. Also, the demand for ‘Business Centers’ to meet ‘work from remote spaces’. The redesign in commercial realty in sync with social distancing norms and rotational work culture. There will be more emphasis on open spaces and green ecosystems as also sustainable development aspects like sewage and water treatment plants, recycling of waste, and use as horticulture manure.

The Indian Government’s role in terms of enhanced spending on infrastructure through 2020 will continue to positively impact the economy through 2021.  The ‘infrastructure push’ will open up new opportunities, and the real estate landscape will flourish with new routes of connectivity across the country. The focus on sustainable real estate, with being green and eco-friendly will grow through 2021. Real estate players through 2021 and beyond will focus on creating a sustainable living by bringing in sustainable practices in development.

Growth in commercial real estate mirrors the country’s economic growth, and the coronavirus pandemic impacted the commercial work-spaces segment. Developers are factoring in the changed scenario as we move into 2021. Offices in India have undergone a series of cyclical and structural changes, ‘work from home’ has resulted in redefining job profiles through higher digitization and centralized data storage in the cloud. Huma resources are being upskilled to adopt new trends and stay relevant to the workforce economy.

Going into 2021, office space that meets the requirements of team collaborations, knowledge sharing, and networking culture will be in demand, and developers will make necessary changes to meet this. New asset classes like Industrial & Logistics parks and Data centers will continue to be the new sunrise segment in Indian real estate, and through 2021, will see new growth avenues. Segments such as retail, entertainment, hospitality, and F&B will take longer to return to pre-COVID19 pandemic levels through 2021, although the vaccine will definitely,  make a huge positive difference.