The real estate sector has noticed an increase in inquiries as the number of COVID cases decreases and vaccination campaigns gain momentum.

As a result of the coronavirus pandemic, people have realized the importance of owning a home, thus reinforcing the belief of many buyers that real estate is an asset class in which they can invest for personal use. The benchmark low interest rate regime and the ever-higher housing affordability act as an enabler to further enhance sentiment in favor of real estate.

Real estate performance after demonization

The Indian real estate sector took a major jolt from the de-circulation in 2016. It took almost a year after the government’s move to demonize high-value banknotes, for the market to rebound. Real estate has traditionally been the most loved asset class among Indians and this remained the main reason for the pickup in buyer sentiment during that year.

Our data shows that metrics of supply and demand have improved steadily starting in 2017. The first outbreak of the Covid-19 pandemic in early 2020 hit the industry like a bolt of the blue to the apple cart of developers. After that, both sales and launches touched record lows during the two shutdowns that were imposed to contain the spread of the virus during the two outbreaks.

For all its downsides, the pandemic has been a positive enforcement factor for improving buyers’ morale toward home ownership. It exposed the vulnerability of other asset classes in the event of a crisis while highlighting the need for a private home in such a scenario

Our data also shows that because some semblance of normalcy returned each time after lockdown, buyers immediately made more informed home buying decisions. This pent-up demand ensured that the sector returned to normal at a much faster rate than experts initially expected.

Several new projects have been launched by the developers, which indicates that the demand has increased significantly during these difficult times. In total, 122,426 units were launched in 2020, and 182,639 homes were sold. These numbers may seem dwarfed by numbers from previous years, but that is nothing short of impressive when you consider all the odds against the sector.

On the whole, the sector has noticed an increase in inquiries as the number of COVID cases decreases and vaccination campaigns gain momentum. Sample of this: In three quarters of 2021, 140,087 units were launched and 138,051 sold, which is a 199% quarter-on-quarter increase in launches and a 228% year-over-year increase. Sales are up 250% q/q and 59% y/y.

The percentage of different price segments in new launches and sales also reflects the changing preferences of buyers. In the third quarter of 2017, the percentage of new launches in the 45-75 thousand rupees category was 23% as against 33% in the third quarter of 2021. Sales in the same category rose from 23% to 28% during the same period. Even the percentage of launches in the Rs 1 crore category above increased to 22% in Q3 2021 from 17% in Q3 2017; The share of sales in the same category increased from 16% to 20%.

As is the case today, consumers are actively searching for and investing in real estate due to rising housing prices. Home loan interest rates are hovering around 6.50% per annum and attractive discount offers from builders remain plentiful. People have noticed that real estate is still the best asset class available to invest in for the long term in order to ensure returns.

Given these positive repercussions in the recent past, industry proponents predict that we are on the cusp of a complete turnaround in the Indian housing cycle. Consumer confidence is expected to remain elevated for the next few quarters, giving the sector a positive overview.

(By Rajan Sood, Head of Business, PropTiger.com)

Financial Express Telegram Financial Express is now available on Telegram. Click here to join our channel And stay up-to-date with the latest Biz news and updates.

Source link

By admin

Leave a Reply

Your email address will not be published.