Good morning, to put it simply, demand for real estate is back.
Gen Z renters are packing up from their childhood cribs after a long stay at home and remote-working millennials are picking larger apartments in smaller cities.
Baby boomers (born: 1946-64) are offloading investments and going asset light, while India Inc is calling an end to the WFH honeymoon by leasing more office space.
What an interesting time to be writing a daily real estate newsletter.
Double Or Nothing
The blues of the pandemic are transitioning to green, at least for major developers operating in top cities.
With an effective vaccination drive and a renewed faith in the economy, demand for housing has bounced back.
What Do The Numbers Say?
Per JLL's recent Residential Market Update, housing sales jumped over 2X, with 32,358 units sold during the July-September period across seven major Indian cities.
In comparison, housing sales stood at 14,415 units a year-ago in the same period, while 19,635 units were sold in the previous quarter (Q2, 2021).
Solo Performances (Q3, 2020 to Q3, 2021 Units)
- Bengaluru 🔼 1,742 to 5,100 Units
- Chennai 🔽 1,570 to 1,500 Units
- Mumbai 🔼 4,135 to 6,756 Units
- Delhi NCR 🔼 3,112 to 6,689 Units
- Hyderabad 🔼 2,122 to 4,418 Units
- Pune 🔼 1,344 to 5,921 Units
- Kolkata 🔼 390 to 1,974 Units
Units include new apartments only and fence sitters who made the jump recently are major demand drivers.
Transparent Models
An internet search for 'property agreement format' today results in pages of links, all leading to different formats for the same basic transaction - a property sale.
Thankfully, this hypermarket beating inventory of docs on offer could soon become redundant.
The Backstory
For eons, builders and agents have used arbitrary, biased agreements that do not place customers at an equal platform with them, violating Articles 14, 15, 21 of the Constitution.
Indian home buyers are not new to cases of deliberate delays in property handovers.
And when consumers lodge complaints, the police often don't act, citing clauses from such lopsided sale agreements.
It's Time To Agree
Yesterday, the Supreme Court issued a notice to the Centre, asking it to frame model agreements for all builder-buyer and agent-buyer transactions, to usher in more transparency in the real estate sector.
These universal agreements will also conform to the Real Estate (Regulation and Development) Act, 2016 to ensure protection for consumers.
Is It A First?
No. In fact the housing ministry had earlier issued a model builder-buyer agreement for residential projects, but no state adopted it fully.
Only Union Territories have so far notified the agreement in complete alignment with the central rules.
While homebuyers have welcomed the move by the apex court, lawyers are figuring out how numerous state specific laws make such a universal agreement difficult to achieve.
Half A Cup Extra
- Talking about a K-shaped recovery, Niranjan Hiranandani feels that the real estate situation today is good, bad and ugly.
- Machine learning (ML) and artificial intelligence (AI) should replace emotions when underwriting a deal or evaluating properties.
- Four greenfield airports may be ready in 3-4 years in Karnataka, at the cost of around INR 1,000 crore.
- With most of India Inc calling back employees to the office, office realty is seeing an uptick in demand.
A Lesson Or Two
If you are a young real estate professional starting out in the sector with big aspirations, this blurb is just for you.
By now, you must have realised that there is no typical day for us real estate peeps.
Each day is unique and cycles between client meetings, virtual pitches if needed, site visits, and other responsibilities.
Nevertheless, most real estate sales folks fall into a general pattern of office work in the mornings and appointments in the afternoons, evenings and weekends.
Your Timeline - The Start
The beginning of your career should be spent on the phone and in meetings, with hopes of finding buyers and sellers.
This is a difficult time, as you have not yet established a reputation. A good strategy would be to rely on the name of your employer to attract clients.
This is also a good phase to prepare for a period of long hours and no commissions as you learn the ropes.
But remember, there are enough tales that go, “I made literally zero money for 6 months, but then suddenly after 3 sales in a row, I made enough for the rest of the year.”
Five Years From Now
Most real estate professionals would have developed a reputation by this time. You too would be reaping the benefits of referrals and repeat clients.
Early shortcut users however, will still experience frustration, with low sales and meagre pay checks.
You don't want to be that guy, so remember - hard work always pays.
Ten Years Out
By this time most agents would have advanced to the highest levels of their firms, often working with the best properties in the market.
But the plateau reached at this point will often prompt you to strike out independently and start your own firm.
Though highly rewarding, the task of getting established can be arduous.
📌 Pro Tip: Property markets are always under the influence of economic fluctuations, and the biggest hurdle you have to cross is the resulting lack of stability in your income.
It's more mental than you know.