7 Reasons Why 2022 Could Be a Great Year for Real Estate
The pandemic has dramatically changed the way we live and work. While every other industry was affected, the real estate sector has shown amazing resilience and is poised to bounce back with full vigour in 2022. The future of real estate in India after Covid will be driven by a significant rise in demand, especially in areas like residential, office, warehousing and data centers.
As per the Indian real estate market forecast report by National Real Estate Development Council (NAREDCO), the sector is expected to contribute around 13% to the GDP by 2025.
Let us look at some of the top real estate trends that could gain momentum this year.
1. Sustainable residential developments to be prioritized
New-age buyers and developers are looking at methods to minimize the impact on the environment. Adopting green building initiatives like solid waste management, water recycling, rainwater harvesting, utilization of renewable sources of energy and a design that optimizes natural ventilation will feature in the agenda of top builders in the country.
Sustainable real estate development is one of the core values of Brigade Group. We conduct social and environmental assessments among suppliers to ensure green practices are followed.
2. Co-working and mixed-use spaces to gain traction
With hybrid work in trend, both the companies and their workforce are constantly looking out for spaces that offer flexibility and convenience. Co-working spaces are more economical and more attuned to modern work styles.
Highly versatile, mixed-use developments are looked at as a way to promote a healthy, holistic and well-balanced lifestyle for buyers. In Bangalore, the Brigade Group is a pioneer in developing mixed-use developments. We have also recently entered the co-working space with ‘BuzzWorks’.
3. Residential market to witness an upward trajectory
With a rise in prospective homebuyers, there could be around a 5% capital value growth projection for the residential property segment this year.2 People will continue to look out for bigger homes, better amenities and attractive pricing. The rising need to accommodate the country’s growing urban population is also a contributing factor.
4. Warehousing and data centres to get a boost from e-commerce
In the commercial sector, the increase in online shopping 3 has raised the demand for warehouses and data centres to process huge amounts of inventory and data being generated. The warehousing sector may end up being the next big opportunity in the Indian real estate market.
5. PropTech innovation adoption to increase
Significant digital transformation is expected across the real estate sector with the adoption of technologies such as Big data, AI, Machine Learning, Virtual Reality, IoT and Chatbots. The industry is gearing up to integrate tech innovations in places such as back-office processes, digital treasury solutions, digital contracting, AI-driven marketing, rent payments and vendor invoicing.
Brigade REAP, Asia’s first real estate accelerator program, helps businesses in the sector leverage technology to unlock sustainable value.
6. Land appreciation value to rise
Renewed buyer interest in residential real estate and increased material cost will most likely drive-up land prices further. In the last 24 months in most urban and semi-rural regions, the appreciation value of land has seen around 50-150% growth for the residential, commercial and agriculture sectors.
7. Demand for luxury real estate to go up
A large number of homebuyers will continue to look into investing in luxury homes that offer uber-rich ambiance and lifestyle upgrades.5 The rise in wealth amongst the startup ecosystem is one of the factors driving luxury real estate trends. Posh homes are seen as a way to help with utilizing the funds better.
As per the Bangalore real estate market forecast, mid-segment projects dominated launches in the recent quarter with around 75% of NRIs opting for Bangalore as their most preferred destination for buying homes.
The progressive Union Budget 2022-23 has also given the recovering real estate industry the much-needed impetus. Key announcements made in favor of the sector include:
- Construction of over 80 lakh affordable houses by 2023
- Urban development via the concept of megacities
- Reduction in corporate tax for co-operative societies
- Extension of budget scrap duty on steel by another year
The property growth rate in India is expected to reach US$ 1 trillion by 2030.7 Going by the recent trends, the future looks quite promising for real estate. Automation, experiential and immersive technologies and smart properties that are smart enough to integrate the nuances of human emotion could propel the sector to unparalleled heights.
- Indian real estate and construction: Consolidating for growth (assets.kpmg)
- The foreseeable real estate trends for 2022 (99acres.com)
- The Luxury Housing Outlook report 2022 - International
- Outlook for Indian Real Estate in 2022 (99acres.com)
- Indian Real Estate Industry: Overview, Market Size, Growth, Investments...IBEF