There has been a strong consensus among industry observers that the real estate sector has been going through a major crisis over the last few years. While there seems to be some signs of recovery over the recent past, the overall slowdown in the economy does not bode well for the sector which has already been struggling. However, amid all this doom and gloom, Magicbricks CEO Sudhir Pai offers some positive insights about the sector saying that even as there still remain concerns about the primary real estate segment, there are other segments which have either been doing really well, or at least have shown promising signs.
Highlighting that co-living and co-working segment has had one of the best years in 2019, Pai added that even in primary real estate, there are markets, especially in South India, which have been doing reasonably well.
“First of all, primary real estate is just one part of real estate. The way we look at it is a lot of parts or segments in real estate have been doing really well. If you look at residential rent piece, it has been absolutely stable. In fact, in cities where there is a fair bit of migration on new jobs getting created, rental activity has gone up. And we’re seeing a fair bit of uptick,” he said.
Pai added that there is a lot of action in co-living and co-working segments.
“Last year, we might have had one of the best years ever when it comes to co-living, co-working and student living. There are a lot of people who converted spaces which were underutilized into co-working; and there was a lot of latent demand there as well. These three segments possibly had the best year in the last 12 months,” he elaborated.
Even the commercial real estate segment has been seeing a fair bit of uptick. And when it comes to residential segment, some markets especially in South India have done reasonably well coupled with the fact that the southern commercial markets have been having a great run.
According to Magicbricks’ PropIndex Report for October-December quarter of last year, a silver lining in the residential sector appears to be visible with 10 cities out of 12 key residential markets of India showing positive market dynamics. According to the report, South India markets continued to resist recessionary pressures, with prices appreciating in all three cities of Hyderabad, Chennai and Bangalore. Besides, Pune and Navi Mumbai have been doing commercially well.
“I think the interesting aspect to this is that commercial typically leads to residential in some form. So it's often the leading indicator of what happens in residential with a one and a half year kind of lag,” Pai explained.
“So if you look at real estate on the broad whole, several segments of real estate have had a reasonably decent year. Primary market continues to be under pressure and has had some tough years since 2016 onward. But good things are happening there in some specific locations, which is a good sign,” he said.