Resurgence of Indian real estate after a year of pandemic
Source: The Financial Express ( https://bit.ly/3yBn8Jp )
Today, 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.
India’s resilient and burgeoning real estate segment has always remained an investor’s favourite, and one of the most sought-after realty markets globally. The growth potentials are such that the segment is poised to account for 13% of India’s economy by 2025. 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. Same sentiments were reflected in a report that informed only 19,038 units were sold across India’s eight key property markets during Q2 2020. Similarly, only 12,564 units were launched during this period across the same markets. The sale of residential properties declined by 79% annually and new supplies dipped by 81% 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