Indian real estate after a year of pandemic
15 June 2021 View : 502 Author : AdminIndia’s resilient and burgeoning real estate segment has always remained an investor’s favourite, and one of the most sought-after realty markets globally. A major wealth creator and one of the largest employment generating sectors, it has undoubtedly feared unwanted consequences at the onset of the pandemic last year, but predicting the challenges early and injecting quick reforms – which included financial assistance including loan moratoriums, stamp duty cuts and tax reliefs through conducive government policies and comprehensive and well-calibrated strategies — helped the sector continue its growth even after a temporary pause in 2020.
The onset of pandemic followed by a stringent nationwide lockdown imbued huge challenges before the sector, bringing it to a temporary standstill. The sale of residential properties declined and new supplies dipped in 2020. Furthermore, a dip in sales and supply of commercial spaces was witnessed during the shutdown.
Foreseeing the perils of the pandemic early, the governments made quick and important decisions and announced relief measures. The Prime Minister boosted the morale of the stakeholders by launching the Aatmanirbhar Bharat campaign, which was strengthened by RBI’s announcement of loan moratoriums. Stamp duty cuts, reduction in loan rates largely aided the developers during the volatile times. Strategies were re-envisioned quickly by adapting digitization and reaping benefits from emerging concepts like work-from-home model, remote offices, second homes, big spaces, etc. Ease in investment opportunities through flexibility in REITs and tax reliefs boosted market sentiments and today, the sector is on its road to recovery with homebuyers and investors returning to the market.
A mix of factors like increased demand, low-interest rates, better household savings and government support catapulted growth. The top 7 cities of the country staged an impressive comeback post lockdown last year.
Real estate has always remained resilient, and buyers look at the segment also as a long-term investment. Developers during this ideal time took advantage of the pent-up demand to clear most of the unsold inventories. With sensible pricing, buyers too stepped out to invest in homes. The demand picked up with them coming forward to reap benefits of the reduced demand and increased negotiation potential, and strong interest from sectors such as technology, banking, financial services, and others. Tech-enabled systems, increased momentum of operations, demand for bigger flat sizes and independent floors and new trends are making the market look promising for the next coming quarters.
Today, undoubtedly the second wave of coronavirus has imbued uncertainty in the sector resulting in a temporary pause, but developers are now better prepared and well-versed with the know-hows of a pandemic. The Indian real estate sector is now a buyer’s market, and the ongoing inoculation program is boosting the confidence of homebuyers. It is most likely that the sector will resume its growth from Q2 of FY 2021-22. We will see a steady flow of investments that will ensure growth opportunities with higher returns. The halt will be short-term and cheers and confidence in the market will return as soon as we successfully bend the Covid curve.