Flashback: It was a roller coaster ride for real estate in 2016
Deals fell apart after demonetisation, but the year also saw a boom in co-working and commercial realtyreal estate Updated: Jan 02, 2017 15:43 IST
The jury is still out on whether demonetisation will be a real game-changer in the long run, but as soon as it hit, a shudder went through an industry that had been stagnant to begin with through most of the year. Deals that had been made fell apart; projects that were up for grabs had to rethink their sales pitches.
The hope, of course, is that eventually it will take much of the black money out of the real-estate market, bring prices down and allow for greater transparency — especially given the imminent imposition of RERA as a further boost to the latter.
For now, it’s had most potential buyers postponing their purchase plans. And it’s got builders offering freebies, inventing schemes and offering compensation against future falls in rates, in an effort to keep the buyers buying.
So will it still be 60-40 in the new year? Time will tell…
IT WAS A ROCKY YEAR FOR BROKERS
Between e-governance, smartphones and buyer-friendly apps, you could — if you chose — go from house-hunter to home owner without any help from a broker.
According to a 2016 study by a group of researchers at Oxford University, the potential for artificial intelligence computer algorithms to replace people in jobs such as real-estate brokers, brokerage clerks and telemarketers is estimated at between 97% and 99%.
In the short term, some are trying to use technology to stay relevant, and even perhaps become more so than before. A bunch of brokerfriendly apps now allow them to list properties, network with each other and with clients, even design micro-sites for themselves. This was helping, pre-demonetisation. Now that that storm has broken, it’s back to wait and watch and hope the worst will soon be over.
COMMERCIAL BEGAN TO WIN OVER RESIDENTIAL
A recent report indicates that, over the past decade, 31% of Indian ultra-high-net-worth individuals increased their asset allocation to residential real-estate, but that number is expected to drop to 22% by 2025, with more of these investors favouring the faster-moving commercial projects. We saw some of this shift beginning in 2016. Going forward, the most popular sectors of commercial property are set to be office spaces, warehousing or logistics facilities.
As they provide steady rentals and are in shorter supply than residential units, commercial spaces are witnessing high absorption levels already.
VIRTUAL TOURS BECAME A REALITY
Virtual reality has added the much needed pizazz to how realtors showcase their projects to potential buyers. Be it 3D walkthroughs or interactive screens that enable users to self-design layouts, amenities and colour schemes, these virtual tools became very effective mediums of promotion. A number of housing portals such as Common Floor, Housing and Makaan showcased the use of virtual reality experience to help consumers visualise under-construction properties or provide a virtual tour for customers, in 2016.
Social media, on the other hand, amplified the reach and efficacy of marketing campaigns in the real-estate market. Some of the larger brands in real estate have over 200,000 followers across social media channels. In fact, the digital medium in general has become an essential tool in real-estate.
CO-WORKING SPACES BECAME BIG BUSINESS
This was the year it became difficult, and indeed rather old-fashioned, to try and tell work from play, or office from café. With more youngsters making a living in more unusual ways than ever before, that uniquely urban 21st-century phenomenon — the co-working space — became not just more popular and more favoured, it also became big business in the realty sector. Already, commercial had begun to win over residential in our spacestarved city with its rising inventory of housing units. Co-working then became an even lower-risk investment option, and there were more of them coming up all the time. A report released by realty consultancy JLL recently found that Mumbai is second only to the techie hub of Bengaluru in the number of such spaces, with more than 2,500 seats available. It also predicted that, by the end of the year, about 40 new co-working spaces will have come up in metropolitan Mumbai, with another 50 new facilities expected in 2017.