Sustainability has become a buzzword and crucial consideration for individuals, businesses, governments, and organizations worldwide. Whether it is meeting between Modi and Biden in Washington DC, or class sessions in schools — the talk on climate change and environmental concerns inevitably comes out to save the Earth from the vagaries of nature and calamities. From green energy to green homes, environment sustainability has caught the attention of people in droves. The stand of consumers has changed diametrically as they are increasingly becoming conscious of climate change and its impact on the environment and society, seeking products and services that align with sustainability. Businesses that prioritize sustainability can attract and retain customers, build brand loyalty, and gain a competitive edge in the market. From real estate to railway and from hospital to hospitality, climate change-&-sustainability has taken centre-stage of discussion across the industrial spectrum.

Real estate donning green skyline

India’s real estate sector is undergoing a transformative shift towards sustainability and environmental consciousness. With the growing concern for climate change and the need for energy efficiency, green and sustainable homes are emerging as the future of the country’s real estate industry. These homes not only contribute to environmental conservation but also offer numerous economic and health benefits to residents. A green and sustainable building is considered to be environmentally sustainable to maintain the quality of the environment. It uses environmentally friendly and recycled building materials, focussing on efficient use of energy, water and construction materials. According to studies, green buildings could save up around 30 percent of energy and 50 percent of water.

Green buildings going for higher occupancy rates

In order to combat climate change and frequent nature’s catastrophe, millennials and youngsters are religiously batting for eco-friendly and sustainable projects. According to a study conducted by Colliers and the Royal Institution of Chartered Surveyors (RICS), developers have put spotlight on green real estate and high-performance buildings in the face of new inclination of buyers towards sustainable homes. As per the report, green buildings have witnessed higher occupancy rates and rental premiums. According to Leadership in Energy and Environmental Design (LEED), a US-based global building rating and certification system, the expansion of LEED certified buildings underlines a significant change in the attitudes of buyers in India. Delhi-NCR, especially Gurugram, is said to be the topmost LEED building growth place among other big cities such as Mumbai, Kolkata, Bengaluru, Chennai, Pune and Hyderabad.

Modi Govt’s initiatives and cascading impact on real estate

In a bid to ensure sustainable development and preserve the ecosystem, the Modi government has taken several initiatives and steps to tackle climate change and rise in temperature. The BJP-led ruling establishment at Centre has over the past nine years launched various schemes to address the challenges of climate change: Green Rating for Integrated Habitat Assessment (GRIHA), Green Credit programme, Green Hydrogen Mission, GOBARdhan, MISHTI, Amrit Dharohar among others. During India’s National Statement at CoP26, organised in Glasgow in October-November 2021, Prime Minister Narendra Modi announced a global call for Mission LiFE (Lifestyle for Environment). Aiming at youth around the world, who take climate initiatives aligned with the concept of LiFE, the Union Ministry of Environment last year launched the “In Our LiFEtime” campaign to encourage young population aged 18 to 23 year to become messengers of sustainable lifestyles. Such concerted efforts of the Modi government have created an ambience of sustainability in India which has had cascading impact on the real estate industry as well.  The government has encouraged, emphasized and incentivized sustainable home projects. Real estate experts say that the government initiatives promote sustainable housing practices and contribute to the rising demand for green homes.

What real estate players doing for sustainable homes

The government initiatives and growing awareness among people have driven the demands for green buildings. In line with the vision of the Modi government, developers have embraced the significance of green real estate, incorporating advanced technology to minimize environmental impact, innovative construction designs with zero emission, sustainable materials, and use of green energy. Builders, especially in Delhi-NCR, have started work with renewable energy sources such as wind energy and solar power. These efforts will lower carbon emissions and dependence on fossil fuels as well. They have also prioritised energy-efficient appliances and lighting systems to minimize greenhouse gas emissions. The Delhi-NCR real estate players have signified rainwater harvesting systems and waste water treatment plants to encourage water conservation. Green spaces, vertical gardens and rooftop gardens are featured in housing societies in Delhi-NCR. Real estate players have focussed on electric vehicle charging stations, bicycle lanes, community gardens, sustainable infrastructure and amenities. Such initiatives of builders have encouraged people to follow eco-friendly practices, and create community engagement towards the environment.

Green homes: Cost savings for homeowners

One of the primary reasons green and sustainable homes are gaining traction in India is the potential for long-term cost savings. While the initial investment may be higher, the operational costs of such homes are significantly lower. Energy-efficient technologies and renewable energy systems reduce electricity bills, water-efficient fixtures minimize water expenses, and better insulation lowers the need for heating and cooling, resulting in reduced utility costs for residents. Additionally, government incentives such as tax breaks and subsidies for green buildings further enhance the financial benefits for homeowners and developers, making sustainable homes a financially attractive option. Delhi-NCR homebuyers are of the firm view that the higher price of green homes could be redeemed with long-term cost savings on the maintenance of sustainable housing apartments.

Wrapping up of words

The future of India’s real estate sector lies in the adoption of green and sustainable homes. With their focus on environmental conservation, energy efficiency, cost savings, and improved quality of life, these homes offer a multitude of benefits to both residents, especially in Delhi-NCR, and the nation as a whole. The growing demand for eco-friendly living spaces coupled with government support through incentives and certifications are driving the transformation of the real estate landscape. By embracing green and sustainable practices, India can pave the way for a more sustainable and resilient future, setting an example for the rest of the world to follow. Gurgaon-based real estate honchos have played commendable roles to keep the momentum of sustainability going as the skyline in Gurugram is getting blurred in a green and sustainable ecosystem — harbinger of effort to save the earth.

-Ramakant Chaudhary

Ramakant Chaudhary works with PR Professionals as DGM-Content Development, and has worked in various editorial roles with Financial Express, Mint (Hindustan Times Group), The Times Of India, Jagran Post (Dainik Jagran Group), The Pioneer, and The Political and Business Daily. He writes on politics, government policy, economy, infrastructure, real estate, social issues, lifestyle, and health

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Real estate experts are of the firm opinion that the fundamentals of the Indian economy as well as the dynamics of its market will insulate the country’s housing sector from the global economic slowdown. They are of the view that the sentiment of Indian homebuyers has been positive because of a suitable market ecosystem. Also, a pause in RBI’s rising repo rate and dazzling domestic economic outlook will help the housing market sentiment buoyant.

Housing demand

According to a recent report prepared jointly by Credai, Colliers, and Liases Foras, home price in India has increased 8 percent during January – March period of 2023 with Delhi-NCR registering a humongous surge of 16 percent, closely followed by Kolkata and Bengaluru with 15 percent and 14 percent year-on-year increase respectively. The tangible reason behind such a steep surge in home prices is said to be robust housing demand and consistent quality launches by high-end developers.

Real estate boom in small cities

If the cascading effect of the West slipping into recession and subsequently IT/ITeS companies tightening their budgets reach India, the commercial segment could have some bearing. However, the residential real estate ecosystem in India has been robust with astounding sales records in 2022. In the backdrop of Covid catastrophe that brought the world economy to its knees, the year 2022 witnessed a major real estate boom in Tier 2 and Tier 3 cities and continued the growth momentum in hurly-burly of the global slowdown.

Rosy real estate in 2023

The Indian economy is on the cusp of becoming a world leader. Soaring urbanization, larger disposable incomes, and a rise in GDP per capita script a rosy picture for the real estate market in 2023. Despite sluggish trends in the global economy, India’s strong growth potential paves the way for the high demand for offices and commercial space in Tier 1 and Tier 2 cities. Catering to the needs of young growing India, the coworking sector — coworking is a situation that allows several workers from different companies to share an office space– as media report suggests, may cross 50 million sq ft by the end of the year 2023 that would be a year-on-year 15 percent surge.

Strong economic conditions

The real estate market, as experts feel, appears bullish on the future of its economy in 2023. The residential and office market will be spurred by several factors like strong economic conditions, financial stability, GDP growth, healthy supply and demand dynamics, and regulatory framework. The RBI monetary policy, which kept repo rate unchanged, could have far-reaching significance for the home finance and real estate market.

Budgetary boost

For the real estate sector, the Union Budget 2023-24 is conducive in several ways. Finance Minister Nirmala Sitharaman has underlined “Green Growth” as a priority. Several organizations are efficiently working on the concept of sustainable and green living which implies a brighter future of sustainable infrastructure in the face of climate challenges.  An increase in the allocation for the Pradhan Mantri Aawas Yojana (PMAY), earmarking around ₹ 79,000 crore for the flagship scheme, will boost the economy related to the housing sector.

In India, real estate has always gravitated investors to grow their wealth. They find alpha opportunities in the investment in the real estate market. Going by careful calibration of market pulse and carrying due diligence, well-informed investors can potentially maximize their returns from the real estate market in the fiscal of 2023-24.

-RAMAKANT CHAUDHARY

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