India’s real estate sector ‘showing signs of steady recovery’: Deloitte Report
India’s real estate sector suffered a severe setback during the first and second waves of the COVID-19 pandemic, but is now showing signs of steady recovery.
Recently, Deloitte Touche Tohmatsu India LLP (Deloitte India) released a report entitled “Reality of Realty in a Post-COVID-19” which captures the key trends that will pave the way for the sector’s recovery.
According to this survey-based report, the pandemic has sparked a change in consumer behavior and this is one of the factors allowing this sector to rebound.
The report highlights that although the first wave had a wide-ranging impact on residential real estate, the subsector quickly regained its equilibrium. 74 percent of those questioned who took part in this survey expect an increase in demand for the housing subsector, of which 86 percent stated an increase of 10-20 percent.
Aditya Kushwaha, CEO and Director, Axis Ecorp commented, “The real estate market is not ready to rejuvenate right now and will continue to move in a fast direction given the pent-up demand. Interest rates are also having a major impact on the current boom. In these uncertain times, home buyers look for projects that are spacious, use sustainable materials, and give preference to a self-sustaining society. They expect a better experience and a long-term connection with their home. We believe that given the changing needs and desires of people, the affordable housing and vacation home segment will continue to thrive in the coming months.
With people resorting to work from home during the pandemic, the commercial real estate sector has been severely hampered. Now with cases declining, vaccination campaigns on the rise, people returning to offices, and organizations adapting to hybrid work models, the commercial property subsector is expected to see healthy growth.
The survey also predicts that data center demand will pick up in India. 88 percent of respondents believed that data center real estate demand after COVID-19 will take center stage because of the digital narrative of “technology,” “innovation” and “data”.
Additionally, privacy and data localization policy reforms and government initiatives mandate India Inc. to focus on local facilities. As a result, 56 percent of those surveyed believe there will be a surge in demand for newer data centers.
“The impact of the pandemic has been profound across all industries, but it seems clear that Covid-19 will have fundamentally changed things in commercial real estate in 2022. As for data centers, there has been a surge in investment in recent years due to a convergence of various factors $ 4 billion in this segment over the next 3-4 years There is a lot of potential for growth in the data center market in India and this is reflected in the increasing demand for data centers and the sheer amount of cables running around the established hubs. ” .
Commenting on the pace of transformation in the real estate sector, Vijay KR, Partner at Deloitte India, said, “With increased interest in residential property from individual buyers and the rapid expansion of GCCs, the real estate sector has picked up where it left off looking for a return to the office and micro Warehousing. As lower interest rates play a role along with government support, we are seeing increasing optimism in most subsectors. “
The festive sales for most of the developers have been very encouraging and most of the industry players are optimistic about what the future holds for them. It is believed that more transactions will take place in the fourth quarter of 2021 than in 2020 if the number of infections remains low.