CHANGING TRENDS IN REAL ESTATE DEVELOPMENT OF MUMBAI METROPOLITAN REGION

Real estate is predominantly considered the safest investment for buyers and the asset realisation was felt immensely amid the COVID-19 pandemic. After the first wave of the pandemic that led to a nationwide lockdown, there was a cutback on investments for buyers and renters who had moved back home. The second wave, however, induced a home buying sentiment as demand picked up significantly. As per the research of CREDAI-MCHI the recovery for supply continues to be balanced as developers focus on completing projects that were left undone due to the lockdowns. There is an anticipation of recovery for supply in the coming quarters in a significant way. CREDAI-MCHI is sure about the growth of real estate sector in India in the scale of $ 1 trillion market size by 2030. By 2025, the real estate market is also forecasted to contribute 13% to the country’s GDP.

Emerging Trends:

Rise and Shine of Luxury Projects:

There was an evident shift in property buying trend as people were investing in luxury projects despite pandemic. With the uncertainty that came with Covid-19, the general impression was that the said situation is going to be difficult for luxury projects in the Mumbai metropolitan region but thankfully that has not happened. The research of CREDAI-MCHI shows strong demand from buyers for luxury projects in the Mumbai metropolitan region.

Also, in the peripheral areas of Mumbai, the rise in demand for independent houses, plots and row houses can be attributed to the realisation of the house value amid the pandemic.

Preference to Ready to Move In LAEGER Properties:

Another trend recorded is that of people preferring ‘READY TO MOVE IN’ inventory as opposed to under construction inventory. This trend has been evolving since pre-pandemic times. People want to buy a home where they can move in and take possession or move away from renting accommodation. With the pandemic, people have realised that home is the safest place and that is why ‘buying a home’ sentiment is possibly at its peak.

Ready to move in spaces will continue to remain the top most priority of today’s customers who do not want to wait endlessly for their properties and expect quick possessions. As these spaces are devoid of such risks, they have become a safer investment option in today’s world where preferences are changing rapidly. The pandemic has given us the time to reflect on the value of space that they call their home. Having spent a good amount of time indoors over the past one and a half years, home buyers now realise the value of having multifunctional homes. Demand for slightly larger homes with added spaces like a work station, reading corner has increased. With increased time being spent at home, buyers are identifying projects with well designed apartments that give them extra breathing space.

Lower Interest Rates Boosts Demand:

As the vaccination campaign continues to strengthen and the central bank maintains its supportive position pegging interest rates at historic laws, residential demand is set to revive strongly in the coming quarters with buyers going in for loans at lower interest rates. The RBI’s firm assurance in maintaining the status quo has also boosted the demand in the market. The real estate development segment in MMR has remained the safest investment option and conducive government policies with guaranteed higher and secured returns are attracting investors to keep market sentiment buoyed. Home ownership sentiment is also induced by decision drivers such as flexible payment plans offered by the members of CREDAI-MCHI.

Digital Mode of Real Estate:

A digital future awaits the realty segment as tech enabled solutions will play a pivotal role in the development of the sector. Trust will play a huge role in sales and that will only come to developers who have proven track record and a robust financial backing. Customer centricity will define the Indian real estate sector and the buyers will search for offering which can sate their demands by coupling emerging trends with their preferences. Change in consumer demand will enable the housing sector to set global benchmarks for better customer satisfaction.

Millennials – They Came, They Saw and They Purchased:

The sale of residential real estate in MMR is not only higher then pre-covid levels but also stands at its highest in the last 10 years. Going by the recent trends, a substantial push came from the millennials. It show cases yet another behaviour change induced by the Covid 19 pandemic as these millennial cohorts were once perceived to be more inclined to rent a home as opposed to buying one. According the research of CREDAI-MCHI millennials comprise of 1/3rd of the Indian population and 46% of the country’s work force, with a spending capacity of approx.. $ 3.6 billions. This millennial generation is generally defined as people born between mid 1990s to early 2000s, more specifically within the 1981 to 1996 period.  In MMR, the millennials are considered profligate spenders and a generation that seeks instant gratification, not worrying or planning much about the future. As the stakeholders of an emerging economy, the millennials have shown a marked change in their habits due to the pandemic. The research of CREDAI-MCHI shows that this largest spending cohort of people is now turning serious in their spending. 2 facts are playing a pivotal role  and one of them is the coming of age of the millennials and in many cases they are the sole providers of their families. Second factor is the pandemic induced lockdown that revealed the handwriting on the wall is the non sustainability of the ‘reckless’ spending and the advent of WFH with its wide spread acceptance.  Another major constituent, which is fuelling the millennial aspiration of buying a hosue of their own in Mumbai into a real time possibility is the lowest ever interest regime prevailing in the current times. The easy availability of credit and having experienced the flexibility and commute less remote work means that the new age buyers can now fulfil their bigger home dreams to accommodate their remove WFH. The combination of record low interest rates that have limited scope to reduce further and incentives by the Government augur well for both the millennial buyers of first time home as an end user and ones looking at a second home for investment.

Previous post
Next post
Leave a Reply

Your email address will not be published.