The COVID-19 pandemic has altered our lives unexpectedly. The way we live, travel and work everything has changed. However, one thing that has significantly changed and is appreciation worthy is technology penetration across several sectors, especially, real estate.
As per the Knight Frank Report, Private Equity (PE) investments in Indian realty have dropped by 57 percent YoY in 2020 amid the reverse migration of labour and stalled construction activities post COVID-19. However, as the ongoing trade tensions between China and the United States have forced many multinational companies to relocate their offices, India gains significantly. The business-friendly policies, availability of talent pool and congenial environment have shifted the focus of many international firms to India. The increased interest of global conglomerates and the reduction of stamp duties in a few States have pumped adequate capital into the Indian realty sector and helped the industry witness slight recovery in H2 2020. It would, thus, be exciting to observe how the situation unfolds in 2021.
Let us look at some of the key trends that will define the industry in 2021:
Rapid technology adoption will ultimately transform all aspects of the industry. The way we design, construct, manage, buy, sell and rent all are slated for a significant overhaul instead of the current archaic methods. Post the pandemic people have become more tech-savvy and have been considerably relying on it for multiple things, from ordering groceries to buying homes. Overall, from this point on, technological adoption is only going to be more widespread. From Augmented Reality (AR) to Virtual Reality (VR) and Artificial Intelligence (AI) for predictive analytics and more, technology is about to take over the realty market.
Technology-driven construction practices will also enable the industry to eliminate the inefficiencies and facilitate project deliveries within the stipulated budget and schedule. Besides, the consolidation of project, parts and people on the digital database will create a transparent ecosystem for project development.
Changing consumer dynamics
The work from home trend is here to stay as it has proven advantageous for both the employees and the employers. Many companies have even changed their work policies and provided permanent WFH or remote work facility for at least the first half of 2021.
This change in the commercial sector will have a positive bearing on the housing market. People will be more inclined to buy homes that too relatively bigger than before. Also, unlike earlier, buyers will have more options as their focus will not be majorly on spaces in proximity to offices.
Considering the enormous size of the real estate sector, we cannot overlook its impact on the environment. With worldwide debates around environmental sustainability and green buildings, the industry is fast catching up with climate-responsive building elements, and the trend might continue to grow in 2021.
The pandemic has exposed the structural gaps across all sectors; but it has also given businesses the buffer to revisit, review and revamp their strategies for a sustained recovery. On the one hand, where the metro cities have been hit with reverse migration, the Tier 2 and Tier 3 cities have gained momentum in commercial and housing real estate hinting at accelerating entrepreneurship in these cities. The demand dynamics have altered and would continue to evolve as the situation unfolds. Holistically, in this new normal, the traditional approaches will make way for transformational methods powered by technology. This will help businesses plug the loopholes with efficient systems and improve the infrastructure and realty around.