Good morning, the much awaited festive season is here and we are hopeful, just like the entire real estate sector is, about the gains coming from it.
Those recovery tales will take a while to emerge but in the meantime, today's Chai has some great blurbs.
Enjoy them without any further delay. 💨
Baby, You've Changed
All of us get into stuff (relationships included) with a feeling that nothing shall ever change. But change is inevitable and often hurtful, even if it's trying to push us into a better spot.
While following numerous housing trends across the globe, we are fairly confident that something about home buying has changed forever too.
No Way!
The pandemic has played a key role in reshaping real estate markets, like we have never seen before and likely never will again.
As we put the worst of Covid-19 behind us, with cities coming out of lockdown, some major components of the way things have become for the real estate sector, will remain.
Like What?
Essentially, both buyers and sellers are more willing today to ingratiate themselves with easier and swifter ways of going about property transactions, and there are a boatload of proptech tools that work hand in glove to facilitate this.
The rapid advance of property technology, like FaceTime home tours, Google maps, online reviews of other homes sold in the same area, community forums and virtual asset platforms are making it simple for buyers to do their homework on their potential purpose and make better decisions.
The biggest shift is in trust. With the real estate sector’s take-up of technology, buyers and sellers are both more confident in their life altering home moves.
So?
The most significant permanent change is in the eagerness of home buyers to buy their new home ‘sight unseen’.
Yes, Covid-19 has turned what was a ‘no-go’ buying tactic into a smart move that could give buyers the edge in purchasing their next home.
In fact, many global cities have witnessed a five-fold explosion in homebuyers not physically touring a property before purchase – a new state of play that experts think is set to stay.
Pre-Covid, out of 20 houses sold, maybe only one of those might have been sight-unseen. Today, that number is 4 or 5, a 5x jump from before.
Essentially, buyers just don’t want to miss out. When that new home is about family happiness or a key lifestyle driver, buyers are now comfortable buying it without physically walking through it.
Everyone has re-evaluated what is most important to them and if they find a house that fits the bill, booking checks are being handed over in person instead of being mailed.
Sheds Of Innovation
We know, it’s difficult to imagine a grey, featureless shed, devoid of the typical meeting rooms and offices, and with no real centres of innovation or product design, as a potential hub for innovation and growth.
But please note that the new tech world is elevating the role of the warehouse from logistics center to a more intelligent and innovative core business environment.
Fork! What's Lifting It?
Here are the 4 emerging trends driving warehousing transformation.
1️⃣ Adaptive Warehousing - Per recent studies, over 65% of consumers chose an e-commerce vendor based on delivery options, and 54% consider fast shipping to be two days or less.
This necessitates modern warehouses to become adaptable and smart, capable of harnessing evolving technologies to outperform the competition - which is nothing but another warehouse in the neighbourhood.
2️⃣ Packaging Evolution Centres - Per Morgan Stanley, Amazon, UPS and FedEx combined is expected to soon deliver 15 billion packages per year, having a significant impact on packaging methods and material.
This is because optimization of the package itself, along with tracking, becomes critical to ensure that packages reach their destination and are not lost or damaged somewhere in the warehouse.
3️⃣ Look Ma, Robots - With human lives becoming increasingly dependent on logistics, warehouses are becoming active participants in creating value moments, using delivery and sorting robots.
Today, these bland sheds are centres of knowledge for determining which products or combinations of products are working for customers and how to automatically order and ship spare parts, for example, untouched by human hands.
4️⃣ Edge Computing - Smart warehousing today is integrating new physical and analytical technologies to realize a host of benefits, including faster problem resolution, improved labour efficiency and operational scalability, cheaper and faster delivery, supply chain visibility, the ability to predict and better adapt to business demands and much more.
Perhaps the next time you pass a giant grey shed on a road trip down the highway, you could remember some of this and tell your friends why those 'hangars' need to be shown a little more respect.
Half A Cup Extra
- The Delhi government's decision to slash circle rates of properties by 20% to aid the Covid-hit sector has actually resulted in increased stamp duty collections.
- Bangalore based Prestige Estates' sales bookings are up 88% to INR 2,111.9 crore in Q2 FY,22.
- In order to address the value of property more realistically, Delhi government will create ~32 subcategories under the existing eight categories of properties designated as A to H that determine circle rates.
We've Got You Fellas
China's real estate market is all over the news for all the wrong reasons. It all started with Chinese real estate biggie Evergrande racking up a debt that drowned its penthouse, while leaving its investors high and dry.
But amid all that gloom, here's some great news from Harbin - the capital of north-eastern Heilongjiang province.
What's Happening There?
Harbin is now one of the first cities in China to specifically support real estate developers and their projects, which have been hit hard by the deepening debt crisis at the China Evergrande Group.
The city feels that builders should get back part of their presale funds held in government escrow accounts as quickly as possible to ease some of their cashflow pressure.
What's more is that as critical cash flow improves, developers with good credit profiles are being encouraged to re-start presales of their projects as soon as they are ready to.
Zooming In
China's real estate market has been witnessing declining sales and investments lately, while increasing unsold inventory is inhibiting growth in new home prices, despite builders offering deep discounts.
Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution, said he expected other cities to follow Harbin in announcing support for the sector, especially "those under great pressure from high inventories, including some tier-three and four cities in central and western regions."
Zooming Out
Morgan Stanley recently lifted its outlook on China's real estate industry to "attractive" from "in-line", anticipating that regulators could ease their grip on the sector to help stabilise it and support the economy.
This has enabled the country's stressing real estate developers to finally breathe a small sigh of relief.
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Wishing all our readers a great Tuesday ahead.
More stories tomorrow.
☕ The Crew@Ginger Chai