Homebuyers in India will be looking at affordability and habitability before closing the purchase in 2022.
We are entering year three of the pandemic and most of us have embraced the new normal. From being caught off guard in 2020, the Indian economy in 2021 showcased much preparedness and resilience across sectors. The real estate sector, which is already in its cyclic trough since 2013, saw its worst phase with business coming to a near standstill across supply and demand chains.
The slump witnessed in 2020, was recovered much faster in 2021, on the back of one key factor that drove the sector back to being talked about in a positive manner unlike the past when it was only in the news for the wrong reason. Importance of owning a home – a feeling induced and accelerated by the uncertainty of the pandemic has given the much-needed boost to the ailing sector. Mirroring the major economic indicators, we saw residential demand rebounding at a much faster rate in 2021. Where demand grew by 85 percent (QoQ) between Q3 2020 and Q2 2020, the sales grew by 250 percent QoQ between Q2 2021 and Q3 2021.
The hybrid work policy and work-from-home of the workforce in cities gave way to a shift in demand dynamics and drivers for residential sales. Data shows that search queries for apartments with 3+BHK configuration grew by 15 percent year-on-year in 2021, while the online search for properties in the ticket size of more than INR 2 crore saw a significant improvement during the year. Along with this, the nearness to healthcare infrastructure, security, and safety of a gated community was one of the key driving factors for closing on a purchase in 2021.
Since online search trends are leading indicators of potential demand offtake, we see 2022 characterized by a well-informed end user who will be looking at affordability and habitability before closing on a purchase.
We see some key trends that will shape the residential realty landscape of 2022.
- Mumbai, Bengaluru, and Hyderabad to set the pace for residential recovery in 2022 – The cities saw increased homebuyer activity post the second wave of the pandemic.
- Surat, Jaipur, and Patna will trend amongst Tier-II cities for home purchase – The cities recorded maximum growth in online property search volume in 2021.
- Larger configuration and adjoining study format will be a preferred segment amongst homebuyers in 2022 – search queries grew by 15 percent YoY for apartments with 3+BHK configuration.
- Premium properties to get a boost in the upcoming year – 1.1x times more queries for apartments with > INR 2 crore ticket size in 2021.
- Residential plots will emerge stronger than ever before – 42 percent YoY growth in search queries for residential plots.
- Greater Noida West (Noida Extension) in Noida will see significant homebuyer interest in the coming year – The micro-locale took a maximum share in national online property search volume this year.
- Top five localities that will lead national residential demand in 2022 – Greater Noida West (Noida Extension) in Noida, Mira Road East (Mumbai), Andheri West (Mumbai), Borivali West (Mumbai), and Whitefield (Bengaluru).
- Rental market to revive in Mumbai, Bengaluru, and Delhi in 2022 on the back of a return to work and hybrid work policies – these three cities captured the maximum share in online search volume for renting a home.
- Tier-II cities to watch out for building-up residential demand – Surat, Jaipur, Mohali, Lucknow, and Coimbatore.
- Nearness to healthcare infrastructure and security will be key to close the home purchase in 2022 – potential homebuyers rank it as the highest desired amenity this year in our Consumer Sentiment Outlook for 2022.
- India will go digital – 42 percent of potential homebuyers want to close the deal completely online or after just one.