2020 began on a optimistic note with the genuine estate sector hoping to boost upon the mix bag efficiency of 2019. The initially heartbreak came when the Union Budget 2020-2021 pretty much neglected the genuine estate sector, barring some superior tidings for the reasonably priced segment. The sector took respite in the government’s concentrate on infrastructure, which would imply opening up of peripheral locations and developing new avenues of development. Then came the international pandemic, leaving every person clueless. However, throughout the lockdown, the sector pulled up its socks to reduce the effect, and also produced its voice heard by the Government of India.
Realizing the gravity of the circumstance, the Government of India came out with a slew of measures and announcements more than a period of six months that helped the genuine estate sector keep firmly on ground. The government granted an extension to comprehensive projects, funds to guarantee liquidity, actions to support stuck projects, rationalized danger-weightage norms, announced the restructuring of loans primarily based on the projects, and linking property loans to LTV.
Reeling below liquidity crunch and lack of activity in initial lockdown months, the sector utilized digital platforms for communicating with the purchasers. The effect was instant as purchasers, who have been sitting at properties and had ample time at hand, realized the significance of owning a property. The digital outreach programmes resulted in enhanced inquiries, and fairly a couple of developers of repute booked units applying on the internet channels. The year saw rainfall when it comes to applying digital, revolutionary schemes, and profitable presents.
The reasonably priced housing segment, on the other hand, survived the onslaught merely since it caters to the value bracket that has maximum demand. Several variables worked in favour of reasonably priced housing, like Rs 3.74-lakh crore liquidity infusion announced by the RBI on March 27, 2020, the CLSS extension announced in May, relief below EPF, and so on. The greatest takeaway for the purchasers, nonetheless, was the unprecedented reduce in the repo prices, which resulted in property loan interests coming down to sub-7%. The tragedy also came as a blessing in disguise for the sector, particularly the reasonably priced housing segment, as the middle class was facing challenges in staying at rented accommodations.
The sector produced a comeback in Q3 with sales and new launches rebounding to pretty much 70% of the pre-COVID-19 levels. Maximum sales have been observed in the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), and Pune all 3 regions accounted for pretty much 80 per cent of the sales in the July-Sept quarter. The reduction of stamp duty charges in Maharashtra followed by Karnataka coupled with developers’ incentives and all-time low property loan interest prices became the catalyst of recovery for the genuine estate sector. Though new provide in NCR was not a great deal, it nevertheless contributed pretty much 15% of the general launches that occurred this year. The reasonably priced housing segment comprised pretty much 70% of the total new provide in the July-Sept period in main cities.
The marketplace is promising, and with the apex bank becoming optimistic about the financial development, the genuine estate sector would see a marked adjust in 2021. The measures taken by the RBI would support the sector reap wealthy dividends as the sector is riding higher on the enhanced demand in the post-COVID-19 circumstance. The marketplace for reasonably priced housing is robust, and in the coming months, there will be more movement. People have realized the significance of owning a property, and this feeling is going to persist.
(By Pradeep Aggarwal, Co-founder & Chairman, Signature Global, and Chairman, National Council on Affordable Housing, ASSOCHAM)