As India has now officially administered a billion coronavirus vaccine doses, real estate sales have also seen a rebound and are likely to match the pre-COVID period soon. With the pandemic halting all activity in 2020 — the effect of which was felt this year too — things are now gradually picking up. The year 2021 began with slow activity and a subsequent lockdown during the early second quarter.
Like many others, the real estate sector too has not been isolated given these events. Realty players have witnessed the halting of activities and construction in 2020, and sales remained impacted for a long time. For the first half of the current year, the focus was on returning to normalcy. As the market regained a sense of normalcy over the last few months, especially with the start of the festive season, this year can be unique in many ways.
The story until now
The pandemic had hit buyer sentiments hard, and given the weak employment scenario, many left rented homes in cities and returned to their native towns to live in their family homes. Having said that, these events also propelled fence-sitters in the market to consider investing and owning a property, and millennials form a majority of this segment. Moreover, the market has remained abundantly supplied, and prospective homebuyers have enough to choose from today.
Due to this, the demand for homes has seen a spike off late which has been assisted by government reforms: we have witnessed the rationalisation of GST rates, a push for affordable homes and the establishment of the Alternate Investment Fund.
Understanding the current challenges of home buyers, in recent times, banks and the RBI have smoothened their interest rates. Various leading state governments have announced incentives over the past two years. For instance, the stamp duty rate cuts of Maharashtra in 2020, and the recent reduction in transfer charges by Noida-Greater Noida Authority have made a significant impact on oversupplied markets. The government’s efforts on mass immunisation against Covid-19 will have a ripple effect of sorts on businesses and their growth.
Festivity-led revival
With the pandemic-led situation improving across countries, and markets, businesses opening up, housing sales have also revived. As consumers come back, sales estimates of the past few months suggest that the demand from first-time homebuyers is high. Moreover, the thought of working remotely has also triggered the need for bigger homes.
Recent trends also suggest that while consumers prefer a ready-to-move-in property, buyers are also looking at developer projects of repute, even if they are under construction. This high level of trust in developer brands is the result of professionalism shown by companies, and is likely to continue in the last quarter (October to December). Builders have already rolled out good deals and as a result, sales are likely to witness a high during this period compared to the rest of the year.
South focus
From the performance point of view, southern cities have done better than their counterparts in the north. The affordable and mid-segments in particular are driving residential demand, and cities down South have also led in project completion. Market estimates suggest Chennai, Bengaluru and Hyderabad have proactive developers, who continue to focus on completing projects. Moreover, the strong office market supports the overall growth in these cities. Opening of offices and a return to normalcy will embolden the scenario in these metros.
The market is transforming, and the spirit of festivity continues to aid numbers. The real estate segment will continue to revive and soon get back to pre-Covid levels. However, it is also a time for all stakeholders to introspect. To meet the end-user driven demand, the onus of building right and building fast depends on us. With government support, the focus should be on timely deliveries, as it will lead the way to a better marketplace.
The writer is president, NAREDCO India.
