It is expected that the real estate sector in India will be worth one trillion U.S. dollars by 2030. And by 2025, the industry will contribute a whopping 13 per cent to the overall country’s GDP. Many reasons can be attributed to the boom and the development of this market in the country. Whether it is government policies like reduced stamp duty, record-low home loan interest rates, tax benefits etc. or property developers’ offers such as freebies, financial schemes etc., efforts have been made to make the real estate industry realise its growth potential
As a result of this, the top seven Indian property markets, as per the data generated by leading property advisor JLL India, recorded over a 124 percent jump in housing sales. Further, as one of the largest contributors to housing sales over the past five quarters, Mumbai and Delhi both accounted for one-fifth of total sales followed by Bengaluru and Pune where the sales surpassed pre Covid-19 levels
Rohit Garodia, Managing Partner, Pecan Reams, says, “The government has been hugely supportive with multiple incentives made available. The stamp duty cuts, lowest-ever home loan rates and discounts offered by developers are all reasons for the massive buying that we have witnessed in the real estate market
The pandemic changed the demand and calculus of people. Fence-sitters who had missed out on rebates and offers in early 2021, gained a sense of hope during the festive season that is still ongoing, with multiple benefits, a stable price needle and thus invested increasingly in properties to secure their prospects
“After the second wave of the Covid-19 pandemic, homebuyers realised the value of having their own homes. With the hybrid work model and e-learning becoming the new norms, today the buyer’s top priority is larger houses with multifunctional spaces aimed at separating work and life for optimal productivity, says Aditya Kedia, Managing Director, Transcon Developers.
Now that the vaccination drive has covered a vast majority of the Indian population and the spread of Covid-19 is under control, 2022, developers believe, will likely emerge as the new peak year for the real estate sector with homebuyers’ focus mainly shifting towards under-construction projects
Vipul Shah, Managing Director, Parinee Group says, “In 2022, we expect the positive sentiments to continue. As ready-to-move-in spaces are in demand and available in limited units, the focus will shift to under-construction projects next year. Factors that include an overall improvement in the job market, resumption of economic activity, pent-up demand etc. will continue to guide the evolving real estate market in 2022.”
Hiral Sheth Gandhi, Director- Marketing, Sheth Creators elaborates on the same. “Amidst increasing input costs, deploying technology at various stages of the real estate development process will ensure affordable homes. We are hoping NRIs will invest more in the residential market in 2022 due to the superior foreign exchange conversion rates and increased transparency.”
Office transactions in 2021 recorded strong Q3 growth at 12.5 million sq ft, up 168 per cent on-year despite the second wave and a looming threat of a third one. Analysis shows that the total office transactions of the top eight markets in India, during the mentioned quarter performed better and reached 83 per cent of the 2019 quarterly average level
The trend is likely to be continued in the year ahead as the commercial real estate market is standing at a crossroad of huge transformations with new-age concepts and technologies coming at the fore. Also, the leasing activity in the commercial space is expected to take a positive turn with corporates reconsidering their space requirements before calling employees back to offices, and international travel picking its pace again.
Parinee Group’s Vipul Shah while reflecting upon this ongoing transformation explains, “The office space is picking up as work from the office and the hybrid model of work are gradually making a comeback. The focus is on presenting new-age concepts like going phygital, where spaces will define the user experience in the physical world by making use of technology as an enabler. In the coming year and beyond, we expect hybrid spaces to offer a new-age workplace experience. Developers are experimenting with strategies using Virtual Reality, Augmented Reality and Machine Learning.”
In its December monetary policy as the RBI maintained the status quo on key policy rates to keep the repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent the prevailing low-interest rate regime will be there for some more time. As this is the ninth consecutive time that the RBI maintained the status quo, amid uncertainties, for home loan borrowers the environment of affordability will continue.
To keep Omicron-related concerns at bay while the economic recovery is underway, the recent reduction in excise duty and state VAT on petrol and diesel will increase consumers’ purchasing power. Property buyers and developers are waiting for the upcoming Union Budget 2022 with bated breath, as they believe, it will boost the real estate sector if the government enhances deductions against home loans
Furthermore, a slew of measures in terms of structural reforms in the recent past has put India’s real estate sector on a high trajectory to ensure participation from global players. It is expected that India will attract cross border real estate investments worth 2.5 billion dollars in 2022 so that the sector becomes the driving force that holds great dividends for the country’s growth and prosperity
In summarizing the recent turbulent times that the industry has faced and the projection for the year, Mr. Deepak Goradia- Vice Chairman and Managing Director, Dosti Realty says “Over the past year, the top trends that we have seen are robust demand, attractive opportunities, policy support, and increasing investments. Homebuyer requirements have evolved given the impact of working from home and online education. There is a need for well-planned/designed homes, amenities, and open activity areas. Hence projects that offer an integrated township, shopping spaces, hospitals, schools, gardens, are popular. The government has been extremely supportive in understanding the issues faced by the developers and backing the industry through a policy framework, stamp duty rate cuts, etc. The all-time low-interest rates offered by the banks have also greatly benefitted the sector, converting many fence-sitters into homebuyers. While the pandemic posed a challenge to the real estate sector in 2020, the year 2021 witnessed a huge recovery thanks to pent-up demand. The job market seems to be looking up amidst the mass rollout of vaccinations and people returning to offices, so we expect the momentum in 2022 to continue as real estate investment is still being viewed as a safe investment option. Overall, we witnessed a lot of people turning to invest in their own homes and moving away from the rental space. Being one of the pillars of the economy and the second-most elevated business generator sector in the country, real estate will remain buoyant and a harbinger of growth in the coming year.”