Money Chases Real Estate

With the hybrid working model becoming the norm, demand for bigger homes, and the choice of a second house in the suburbs are leading the sector’s revival.

- Sadiya Upade

“IT'S A BUYER’S MARKET!” Covid-19 played secret Santa for the real estate sector, as more and more people opted for larger houses and market players consolidated, mitigating the uncertainty and delivery delays that had kept buyers away. Mumbai, India’s largest residential market, clocked the highest monthly housing sales in a decade in October 2021, according to real estate consultancy Knight Frank India. Hyderabad, Bengaluru and Pune, too, joined the festive cheer. “Covid impressed the need for a home, a better and bigger space, and more amenities, among others,” says Niranjan Hiranandani, managing director, Hiranandani Group.

Onwards And Upwards

So, what will prices be like in 2022? Knight Frank India expects a 5% hike. “In the earlier phase, say 2011-12, the pricing power was with developers. This is a complete buyer’s market. About 80% of the transactions taking place are being driven by end-users. So, the ability to pass on a price hike for developers is limited,” says Prashant Thakur, senior director and head of research, Anarock Property Consultants.

It’s taken years for the beleaguered industry to bring back buyers. Besides Covid, low-interest rates, falling prices, stamp duty cuts, and a flurry of discounts and schemes by companies have aided recovery. While the second wave did slow down the momentum, residential sales grew 92% year-on-year to 64,010 units during Q3 2021, according to Knight Frank India, exceeding the pre-pandemic 2019 average quarterly sales by 4%.