In the transaction space, a composite model that combines an on-the-ground sales force with the latest technologies is being adopted. To believe that real estate can be sold entirely over a curated e-commerce platform is still a figment of the imagination. Property purchase is one of the biggest transactions that a person undertakes during his lifetime, hence it is unlikely that technology can completely replace physical presence. At the same time, technology is beginning to play an increasingly important role in the transaction cycle. It is playing a crucial part already in property search and discovery. Online booking too is gaining currency. A part of this change can be attributed to growing internet penetration and digitisation. RERA, and the growing formalisation of the sector, too are driving this change.
Tier II cities hold potential: Tier II markets hold tremendous potential, as will become apparent soon. Infrastructure upgrades and growing job opportunities will drive housing demand in such tier II destinations as Lucknow, Patna, Cochin, and several others. These markets are on course to catch up with their tier one peers over the next 5-10 years.
Next, let us turn to some of the important trends that we have witnessed in the country's leading real estate markets.
Gurugram: This market is now displaying signs of resilience. Buyer interest is on the upswing in locations such as Dwarka Expressway and Golf Course Road. A key development that has contributed to this is the clearance of the legal hurdle that was holding up completion of the last stretch of Dwarka Expressway.
Noida: High inventory over-hang continues to be an issue here. Sector 150 is emerging as the new sunrise location here.
Mumbai Metropolitan Region: Affordable housing is picking up in the western suburbs of Andheri, Kandivali and Bandra. Developers are reducing the size of their apartments to match demand. The hunt for more economical units is prompting buyers to move to suburbs such as Thane and Navi Mumbai.
Hyderabad: Sentiment remains strong across the IT/ITeS belt, which includes the central and western parts of the city.
Bengaluru: Growing commercial activity and improved job opportunity are driving demand in India's tech hub.
Chennai: Buoyant IT/ITeS and manufacturing sectors are the major drivers of the Chennai residential market. Micromarkets such as Pallikaranai, Old Mahabalipuram Road, Perumbakkam, Porur and East Coast Road (ECR) are witnessing good transaction volumes.
Kolkata: Demand is on the upswing in the northern and southern peripheries of Rajarhat New Town and Tollygunj.
Pune: New launches are mostly happening on the outskirts of the city. Pimpri-Chinchwad Municipal Corporation (PCMC) is emerging fast on buyers’ radars.
What all this means for you: The real estate market will bottom out in the near future. Prices will remain controlled in most cities for the next few months. With ambiguities around RERA getting resolved, new launches have started to gain momentum in several markets. However, many markets still suffer from high inventory overhang. So, developers will focus more on delivery of existing projects rather than new launches for some time.
All this means that it will continue to be a buyer’s market in the near future, and she will continue to enjoy strong bargaining power. However, upward price movement can be expected over the next one year. Buyers need to shed their reluctance and take advantage of the current favourable environment while its last. As inventory overhang reduces and prices begin to rise, developers may not entertain demands for price discounts, freebies, and favourable payment options. This is a good time for investors, too, to enter the markets. But they should pick their investments
after a lot of due diligence on location and project quality. Only those having a long investment horizon should enter the current market.
The writer is co-founder and managing director, 360 Realtors