While the real estate sector took a significant hit in the first half of the year, things are gradually coming back on track as demand for residential properties across the segment regains momentum.
The outbreak of the COVID-19 pandemic earlier in March caught everyone off-guard and took a significant toll on markets across the globe. Termed as ‘Black Swan of 2020’, it led to a substantial drop in business activities and disrupted the supply chain across the world, with India being no exception.
The realty market back home bogged down as it underwent the grind along with other sectors. The nationwide lockdown and social distancing norms stalled the construction activities and site visits, causing stagnancy in the real estate market like never before.
In August, however, the situation began to change as things started to take a positive shape. With the phase-wise unlocking process, industries across the country reopened which brought some respite. The job sector severely hit due to the lockdown also displayed some revival signs with people returning to their offices. The buying propensity of individuals also increased, and this coupled with the onset of the festive period, augmented the realty demand.
The current trend in the real estate sector
The real estate sector is gradually healing. It seems that there will be an upsurge in the market as demand for residential properties in cities such as Mumbai, Pune, Bangalore, Chennai, and Hyderabad has increased. As per the Homebuyer Preference Survey, more than 50 percent of the prospective homebuyers surveyed are likely to buy their dream house by January 2021. There is a synergy between property pricing and the interest rate on housing loans, which is a trend observed almost after 15-20 years.
The market has become buyer-friendly post the COVID-19 pandemic. With several measures rolled out by the Central Government, including the unchanged lending rates, potential homebuyers have re-entered the market and exploring different choices in the preferred budget. Another aspect is that several companies are sticking to the ‘work from home’ format even after the unlock, to cut down on their operational cost. Moreover, as India is not a country of nuclear families, many people have expressed their desire to buy a spacious house that provides ample area for all the family members to work and relax. Hence, the demand for bigger residential spaces has picked up the pace, in the backdrop of homebuyers' altered preferences.
The extensive use of technology by developers has also helped in the faster recovery process. The expedited execution of projects, along with many state-of-the-art facilities and a host of hygiene and sanitisation services incorporated in newer constructions, has proven to be a game-changer. Besides, the stamp duty reduction in Maharashtra and Karnataka, and other States likely to join the bandwagon soon might also bode well for the real estate industry.
Holistically, the real estate industry has suffered a lot, but developers are optimistic that the market will bounce back. Though there could be a few fleeting challenges, the recovery is sure-shot.
