2021 is expected to infuse growth into India’s realty sector and optimism for the same can be attributed to timely government intervention coupled with investment-driven conditions.
Surendra Hiranandani, chairman and managing director of House of Hiranandani, said: “While the residential sector has bounced back faster than expected with the help of various financial waivers and schemes by the Indian government to support the homebuyer, there is a lot that needs to be done for the sector to improve the pace of growth. Along with affordable housing, we need to also provide incentives for housing in sustainable developments, as they are a need of the hour in urban spheres.”
“A series of measures in the form of capital injection, refinancing of banking institutions, policy impetus, subsidies, tax benefits and offers are required to see a faster recovery. The market is robust, and in the coming months, we expect a rise in the growth momentum.”
The Business Expectation survey conducted by the National Council for Applied Economic Research showed sentiment had already shot up by 41 per cent at the end of the July-September quarter. This trend is expected to continue, auguring well for the residential sector too.
The new year will unfold with people continuing to consider real estate as the safest investment option. Increased consolidation in favour of top developers will transpire as developers play catch up with latest technological innovations to enhance consumer experiences. Residential traction in states like Maharashtra and Karnataka is expected to boom on the backdrop of a reduction in stamp duty and construction premiums, said Kanika Gupta Shori, co-founder and COO of Square Yards.
“With the extension of lower interest rates, stamp duty waivers, and continuation of RBI [Reserve Bank of India] instruments, mid-segment homes within the price bracket of 8.5 million-15 million will find more favours from home buyers scouting for well-planned, spacious homes. Property price corrections to the tune of 15-20 per cent across markets might continue as realtors look to offload surplus inventory, providing good options for NRIs to upgrade their family homes in India. With the vaccine expected anytime soon, there will be an improvement in business sentiment and decision-making processes,” said Shori.
A weaker rupee, historically-low interest rates and stamp duty relief leading to reduced borrowing costs, easy availability of loans, and increased affordability attracted NRI investments into the Indian real estate market in 2020. Covid-induced price corrections, attractive payment schemes, increased transparency, greater consolidation and eased investment norms also contributed towards this trend.
Ready-to-move-in affordable to mid-segment homes in the price bracket of 3 million to 8 million have been the chief draw while south Indian property markets attracted most NRIs due to the favourable investment climate and good track record of developers.
Dr S Vasudevan CMD of Ozone Group, said: “The pandemic has brought to focus the need of owning a home. NRIs have made housing as one of their top priorities for themselves and their aged parents, as security for their retirement and also a place to stay when they come back and settle in India.”
“NRI customers are looking at branded, reputed developers who have a good track record. They are even willing to pay a premium for the right product in a good location and by a reliable developer.”
According to a recent report, the RTMI (Ready-to-move-in) properties are the attraction for NRIs and since March 2020 there has been more than 200 per cent increase in inquiries for the same. This demand is seen across affordable and luxury segment.
“The real estate market in South Indian cities such as Bengaluru, Kochi, Coimbatore, Thrissur, Hyderabad and Chennai has performed well in the last couple of years. NRIs are attracted to these cities due to affordable pricing, good rental yields, and a favourable investment climate in the region. In 2021, the demand for housing will continue to rise, as homes in India have become a priority for NRIs too,” said Vasudevan.