The shift in consumer behavior and its impact on Real Estate during a recession ?

A recession causes a sharp downturn in the global economy. It impacts many industries, including manufacturing, IT, banking, and others. It impacts the GDP, trade relationships, business transactions, and consumer purchasing power. Despite this, several nations and industries have planned their routes out of this situation. Additionally, despite the impending recession in 2023, India's real estate market is turning the tables. Residential real estate assets were the most desired asset class for 35% of respondents in the 2020 Housing.com survey. The market's global effects of the COVID slump The current market and its stakeholders have been affected by the recent "covid recession". It produced business upheaval, which resulted in joblessness, inflation, a budget deficit, and weak GDP growth.One of the numerous repercussions of the global crisis is the reduced cash flow in the IT industry. The rising cost of construction is another factor. Higher prices result in higher housing costs, discouraging purchasers from making purchases. Few people can afford to buy a home or piece of property in a bad economy. Many properties still need to be sold when supply exceeds demand. Overall, housing values are declining, and the market is still sluggish. However, despite the pandemic, the Indian real estate industry survived and thrived. 58,914 units were sold in India's eight key residential markets between October and December of 2020, according to a report by the real estate brokerage company PropTiger.com. A discernible change in consumer behaviour, consumers prefer to refrain from investing substantial quantities of money in the market during a recession. Customers cut back on their spending because they are uncertain of "what will happen." Fewer money ends up in ordinary people's pockets due to increased layoffs and business cost-cutting practices. Additionally, consumer behaviour has changed in favour of cleanliness, a sustainable environment, and low risk-taking. The real estate industry in India behaves like an investor. The most reliable asset for an Indian buyer is real estate. Consumers consider them worthwhile investments, whether residential or commercial real estate assets. Many novice investors have been drawn in by the prospect of receiving consistent cash flow from a secure real estate investment. Residential real estate assets have a high appreciation rate, are immovable, illiquid, and generate respectable rental income. Since physical offices and retail outlets have returned after two years of lockdown and uncertainty, buyers find commercial properties quite alluring. Government-backed real estate company The Bhrahmtala Project, the development of multiple-lane motorways, new rail and airline projects, as well as the housing programme "Pradhan Mantri Awas Yojana" are only a few of the several mega-infrastructure initiatives that the Indian government has launched. These will fuel the real estate industry's expansion. In addition, the government has scaled up tax-related subsidies and other purchasing incentives. These programmes and projects will benefit tier-2 and tier-3 buyers. Golden Chance for Real Estate in Tier-2 and Tier-3 Indian Cities. The growth of industrial corridors has made tier-2 and tier-3 cities the prize for real estate. These routes are intended for trade, business, quicker product transit, manufacturing, and economic integration. The economic environment of tier-2 and tier-3 cities may alter due to these corridors. These cities will simplify conducting business, offer top-notch space for warehouses and logistics, and offer easy access to tier-1 cities. In these cities, the real estate market is projected to flourish with many employment opportunities in real estate. IT companies are reducing their workforces even after the pandemic and lockdown have passed, and business is returning to normal. Despite the dire economic climate, the real estate industry continues to grow rapidly.The real estate industry in India will contribute 13% to the nation's GDP in 2025, according to a forecast by the India Brand Equity Foundation (IBEF). The paper details how the Indian real estate market has become a significant factor in job creation. When IT companies are firing employees, many Indian real estate companies are hiring. To meet the growing demand from customers, these real estate companies are looking for blue- and white-collar talent. Conclusion For the Indian real estate industry, which strives for the long term, 2023 will be a turning point. Due to ground-breaking economic advancements and government attempts to empower potential buyers, the psychology of Indian consumers towards real estate assets will be unaffected by the recession.