According to estimates, approximately 600 million people are expected to make urban India their home by 2031, a massive growth from today. Although a lot is going on as aftermath of COVID-19, still, the current housing deficit in India stands at approximately 19 million units, which, in the absence of any meaningful intervention, is slated to double by 2030.
While this number is enormous, there is also a substantial chunk of the population who is now looking at beginning the search for houses online. People using the internet in 2015 were 259 million, which went up to 331 million in 2017.
It has been predicted that the number of internet users is to get doubled by 2022. Fostered by the growth of social media and mobile, the global digital marketing software (DMS) market was touted to grow from $37.48 billion in 2017 to $74.96 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 14.9 per cent during the forecast period that is from 2017 to 2022.
WHO’S THE HOUSING CUSTOMER?
With large-scale urbanisation over the next few decades, it becomes crucial to identify, evaluate the needs of urban housing consumers. Hence, it is appropriate to define affordability in an FMCG way wherein the housing has a function of three broad parameters - the monthly household income, the size of the dwelling unit and the affordability of the home buyer.
Affordable housing customer usually seeks a strong value proposition since there is a limitation of income and difficulty to get access to credit are challenges always. Hence, a well-constructed home with all the essential resources and services in the vicinity holds significant aspirational value for this customer within a planned development. Also, with increasing market volatility, people’s interest will change from investing in mutual funds, SIPs to investing in an asset which they can call their own.
In such a case, affordable housing players can play a major role since the COVID-19 has shed light on the volatility of the share market and will be keen on investing in affordable housing. Connectivity to places of work in urban centres and the presence of social infrastructures such as schools and hospitals are added will become the key driver in the decision making.
Also Read: Coronavirus lockdown: 90 per cent prospective homebuyers except fall in property prices
Opportunity sizing and need for financial dynamism
The National Real Estate Development Council (NAREDCO) very recently introduced housingforall.com an online platform to address the unsold inventories in the country.
This platform will soon be available for the public. Keeping in mind the lockdown situation and social distancing such platforms will provide personalised online home buying experience to the home buyer who wishes to buy his dream house but is unable to due to these uncertain times.
The limitations only exist in mind, and hardships can be overcome by sheer will and logic. Implementation of RERA has already increased customer confidence which in turn has facilitated volumes in domestic markets, with the absence of equity funding and high loan cost, this is still progressively moving towards the appropriate direction. While the market is slowly recovering, there is a need to select the right ticketing size and end-to-end financial solution provider which as an industry, we are ready for, as COVID-19 has left us bolder.
The strain of liquidity crunch in the market is being handled by prudence mix of equity and debt. Therefore it is relevant to say that real estate must be treated as FMCG.
THE WAY FORWARD
We live in a world where basic human necessity like housing is becoming increasingly expensive while luxury items such as smart-phones and electronic goods are getting are more and more affordable. The neighbourhood taxi driver may possess the latest mobile technology or television. However, a home might still mean a compromised solution to him. And yet, the future holds infinite possibilities.
(Mr Rohit Poddar is the Joint Secretary, NAREDCO Maharashtra and MD, Poddar Housing and Development Ltd.)