Investments in Real Estate are Expected to Rise by 5% to 10% in 2022 with Tech Companies Leading the Surge

The Indian real estate market is set for a significant expansion in 2022, with increasing investments projected to rise between 5% and 10%. It is the increased presence of technology companies in the sector which has significantly contributed to this growth. Demand for commercial and residential real estate has started showing a steady increase as the economic recovery from the COVID-19 pandemic progresses.

Tech Companies Fueling Real Estate Growth

The growing scope of tech companies has greatly stimulated investment in real estate. The hybrid work model and the necessity for smart office spaces would compel companies to establish a solid base within the metropolitan cities as Bangalore, Hyderabad, Pune, and Gurgaon top the list of important hotspots where most investments by IT firms are directed into commercial properties.

That's the reason why there has been an increase in the need for co-working spaces and flexible offices in the Indian start-up ecosystem, which is at present flourishing with unicorn start-ups and international tech firms leasing large spaces for offices to accommodate the workforce as it grows.

Foreign Direct Investment in Real Estate

The increase in developing real estate investments has also been attributed to inflows of Foreign Direct Investment (FDI). The push of the Indian government on ease of doing business and relaxation of FDI norms in real estate have lured the global investor. Companies from the US, the UAE, and Europe have shown interest in India for its commercial and residential real estate markets.

The sector looks bright for institutional and private equity investors. According to the industry reports, there is a notable growing allocation in funds into Grade-A office spaces, logistics hubs, and data centres. Digital infrastructure is absorbing rapid change and increasing interest for warehousing and industrial real estate for an emerging e-commerce market.

Rise in Residential Real Estate Demand

Residential real estate is also looking forward to a powerful future. The pandemic has reinforced the psychological state of owning a house, and consumer preferences have changed. From flats of spaces to gated communities to smart homes, the demand is high. Then, there are low-interest rates on home loans, as well as government incentives in the form of affordable housing schemes that make investments in properties far more alluring for the buyers.

The metro cities have recorded a surge of traction in luxury and mid-segment housing. Meanwhile, Tier-II and tier-III cities have positioned themselves as the coveted future investment destinations. Location of homes has become a priority for professionals who now want homes in suburban localities and a clear escape from work-from-home policies due to the better lifestyle and connectivity offered.

Future Outlook

The real estate market is one of the most robust growth engines in the next five years, and it is technology companies that will drive the market really up. PropTech (Property Technology) innovations, such as AI for property searches, blockchain for transaction records, and home digital financing will provide seamlessness in the operations of real estate investments.