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In the blink of an eye, two months of the new year are done and dusted already. Budget22, interest rate revision meets, Omicron, et al have come and gone, but not without reshaping 2022's real estate playbook.
Without much ado then, here are the big changes that met our eye:
🍎 FOMO: Fear Of Missing Out is a thing after all. Interest rates are at record lows but the armchair economist inside all of us knows that sometime in the near future, interest rates are going up. This also means the cost of mortgage today is probably the lowest... ever. Homebuyers know this and they are buying homes without further delay.
🍏 Growth Shifting To Tier 2 and 3 Cities: With the Indian economy climbing back on track, housing demand is healthy again, and due to affordability concerns, hybrid working and congestion in metros, real estate developers are now following homebuyers to small cities.
🍎 The Office Is Changing, Not Going Away: Hybrid working and employee preferences have started to push employers out of high-density core markets into larger, cost-effective locations. And no matter what the headlines may say, the good old office is by no means dead. In fact, it is upgrading and adapting, turning marquee investors bullish again.
🍏 Quantitative Analysis Is In: By deploying AI and machine learning in their investments and by making up for the inefficiencies in commercial real estate data, new age startups are looking to find opportunities where there is historical growth and pricing is dislocated from value.
🍎 Consolidation In Proptech To Continue: Embedded finance, IoT, and digital solutions for property sales and management are expected to continue evolving in 2022. As real estate tech continues to mature, more merger and acquisition deals between proptech firms will likely occur this year.
🍏 Rising Construction Costs Will Benefit Existing Assets: Inflationary impact was felt across the world in new construction, as materials drove project costs up significantly. This inflationary pressure will continue to impact construction costs. As a result, replacement costs will continue to rise and existing assets will likely benefit from demand shifting in their favour.