Digital transformation will accelerate the role of Artificial intelligence, machine learning and Internet of Things for successful businesses to become customer centric- Dr. Niranjan Hiranandani

Dr. Niranjan Hiranandani, National President, NAREDCO

1. According to several market reports, sales are finally moving in the upward direction. Where is this demand coming from?

It is evident in Covid-19 pandemic crisis that homes as a commodity have gained the most traction. The value of owned homes has been underpinned on the back of safety, security and stability it offered. Hence, demand for housing is inherent in-spite of Covid disruptions. The gradual resumption of economic activities has led to pent up demand in wake of economic resilience. Real estate market witnessed renters turning into the first time home buyers, entry of millennial new-age home buyers, trending female home buyers and existing home owners into upgrading mode towards the larger luxury apartments in wake of the new normal lifestyle.

The fiscal stimulants like stamp duty waiver, low home loan interest rates, choice of inventory, deal sweetener by the developers acted as growth catalyst for sustainable home demand. Home buying has largely been sentimental, and the value of owning an owned property has been reinforced in FY21-22.

2. Developers are anticipating project delays due to the second wave of Covid-19. What do you think can be done to address this issue?

The delays anticipated are largely being caused by factors beyond the control of the developer – labour shortages or raw material not being available because of the lockdowns is a prominent cause.

Government of India has announced the first Covid crisis under Force majeure clause considering it as an ‘Act of God’. The developers are well geared to handle the crisis arising out of the resurgence of the second Covid wave. The in-situ construction migrant labours were looked after in terms of food, shelter, vaccination, daily wages etc. Also, sales and marketing were shifted to the digital platform for business continuity. The calibrated opening of activities in the second wave has been able to sustain the demand, obviously the escalation in input cost with rising raw material prices has been detrimental to meet the development timelines.

3. Over the last year, the government announced various measures to boost consumer sentiment. Do you think there’s more scope from the government’s side? 

Mostly, the measures have been directed at boosting consumer sentiment with more liquidity in hand. Industry has recommended government and apex authorities to re-introduce some of the fiscal booster for demand impetus to uplift the sales velocity.

4. Despite the pandemic, REITs are gaining ground. What is the future of REITs in India?

REITs are a globally accepted investment asset class, which has recently been added to the Indian scenario. Given the benefits it offers, it was a foregone conclusion that REITs will gain ground. It is the pandemic which has resulted in a slow roll out; for the investor in Indian commercial real estate, REITs offer an option which fits into the investment plan of most individuals who opt for real estate as an asset class, and the future for REITs in India will be positive.

5. What are some key trends that we can expect in the times to come in the residential market?

As challenges turn into an opportunity, the real estate market will witness new trends to weather the new normal scenario. Digital transformation will accelerate the role of Artificial intelligence, machine learning and Internet of Things for successful businesses to become customer centric. Product redesigning will happen to accord with a new normal lifestyle like open living, green corners, open decks, balcony area etc.

Construction will see a larger share of mechanisation and automation as part of industry trends. Traditional renters will continue to morph into first time home buyers as their rental agreements end; existing homeowners will ‘upgrade’ to larger homes.

6. Talking about property prices, should homebuyers wait for price correction or take the plunge?

The right time to buy a home is whenever the thought that one needs to buy one’s own home occurs. Trying to ‘double guess’ the pricing aspect by waiting for a price correction is a double-edged sword – it cuts both ways.

Market dynamics are shifting, with available inventories of ‘ready to move in’ homes reducing. As the vaccination process progresses, we are seeing a return to ‘near normalcy’, the economy has almost returned to a growth phase. The buyer sentiment has remained high even through the second wave; with dips in April and May being largely off set by sales of homes in June 2021.

These set of parameters would suggest that the ‘price correction’ will in most probability be ‘upwards’. So, the ‘smart buyer’ will be the one who opts to take advantage of the current situation and takes the ‘buy’ decision while it is still a buyers’ market.