COVID-19 Culminating in Opportunity for Developers to Capitalize on Larger Home Demands

Kishan Thakkar K

Introduction

The real estate and construction sector continued to be the most affected in FY21, but there was some optimism during FY21 H2, as economic activity increased. Real estate sector has received some relief from measures such as the reduction of stamp duty, lower interest rates, pent up demand and a halt in new developments. According to a report by Brickwork Ratings, the nation was caught unawares and very hard hit by the second wave of the pandemic.

Because of the government’s accelerated vaccination program, it is now subsiding. Hopefully, the problems caused by the pandemic will soon be resolved. In the first quarter of FY22, most real estate players are expected to be close to a washout, but the pace of sales is expected to pick up in the second quarter, with launches by multiple marquee players. Discounts, freebies, and flexible/affordable payment terms, as well as benign interest rates, are expected to boost real estate sales, even though this is only going to happen during H2FY22. An affordable housing scheme, of course, will play a crucial role in this.

“Larger residences are in demand more than ever with nearly 70% of the online searches on Square Yards inclined towards larger housing units. As per our data, we have seen more than 40% rise in demand for three and four BHK units in H2, 2020 as compared to H1, 2020,” 

The report said.

There has been considerable turmoil in residential real estate and is expected to see some improvement going forward. With the extension of the work-from-home and online education culture, there is a greater need for larger homes, especially for families with working parents. From the low base recorded in H1FY21, residential project sales, which had picked up in Q2FY21 but slowed in April and May 2021, are expected to rebound.

As affordability may be an issue, people are even open to shifting to suburbs. “Need for larger homes has in turn pushed the housing demand towards the suburbs where these options are more affordable. Unlike, pre-COVID times when people preferred staying near the city centre, work-from-home has now pushed up housing demand in the suburbs. Suburban localities across top cities such as Mumbai, Pune, Hyderabad and Bangalore witnessed a growth in capital values owing to this demand”

added the report.

Despite the postponement of purchasing decisions caused by negative sentiments, the need for safe and bigger homes could actually result in increased demand for residential property. Moreover, the sector is expected to see an increase in home purchases from end users rather than from investors. As corporate employees continue to work from home, there may also be a shift toward tier-2 and tier-3 cities, which could lead to real estate demand increasing in these cities.

Increasing demand for larger houses

In Mumbai’s second quarter, according to the Magicbricks PropIndex Report Q2, sales of 2-3 BHKs increased by 10% compared to Q1 and by 18% year-over-year basis. The main driver of this phenomenon has been the success of the ‘Work from Home’ (WFH) experiment. The Mumbai home buyer now prefers larger homes to accommodate their remote hybrid WFH model because of the flexibility and commute-free benefits of remote work. Additionally, even children’s online schooling is set to become a norm, which is why one needs to factor in the need for additional space. Consumers are also looking for houses arranged in an integrated set-up, which are well managed and are equipped to meet all their basic requirements.

Conclusion

An increasing number of people are interested in purchasing larger homes. In order to make an informed decision about purchasing your dream home, you should research the current market condition.  

Staying informed and discussing with experienced & experts while making a decision is an ideal way of making a great deal. All you have to do is contact RoodLand, which provides the best real estate services. For any queries and suggestions, contact us at info@roodland.com and discuss all of your options with us! 

RoodLand is a business solution and advisory organization for the Real Estate sector. It is founded by young professionals with experience in management, marketing, finance, and digital technologies. With their innovative marketing concepts and out-of-the-box methods, RoodLand has successfully delivered amazing results across the region. 

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