Real Estate Sector Shifts Gears
It is darkest before the dawn; this adage has proved to be true for the Indian economy and real estate is no exception. The industry has been facing challenges following the tsunami of industry, taxation and economic reforms over the past few years. Last-mile funding has been a major challenge, with stressed and delayed projects exacerbating the plight and unsold inventories impacting the company’s balance sheets in terms of profitability. The Covid-19 pandemic was the economic shocker which led to the initial shutdown of the economy. However, the gradual unlock of economic activities marked the process of economic reboot.
The sectoral momentum was on uptick while transiting into 2021. Many fiscal yardsticks caused a ripple effect in the real estate sector, churning the sentiment of homebuyers and other concerned stakeholders like developers and banking and financial institutions. The cumulative effect of a booster dose injected in the economic reel turned into record sales with property registration hitting new highs in February 2021. Truly, a new day has dawned after a dreadful and dreary phase.
Time for funding support
As the economic situation improved through the second half of 2020, most of the efforts were directed towards the homebuyers. The need of the hour is support for real estate in the form of project finance. Let it not be forgotten that the sector is among the leading job creators and directly impacts 270-plus ancillary industries thus augmenting economic growth.
The high-gear vaccination drive turned negative indicators into positive numbers of growth. The revised Moody’s rating is in line with the outlook for Indian GDP numbers. The festive tailwinds, high public spending bolstering infrastructure network, enhanced consumption and demand drive, and a growing sense of owning real estate assets has triggered an uptick in property sales. Innovative policy measures along with fiscal stimulus have helped to put the derailed sector back on track. Many micro markets have potential to grow and are shifting gears to accelerate the sales momentum. All these are optimistic signals of an anticipated projection of 10 per cent CAGR growth rate for the Indian real estate sector, which in turn will be a win-win for the key objective of ‘Housing for All’.
Poised for growth
Amid an upbeat economic outlook, the real estate sector is poised to participate in the India growth story. Outcomes of various measures by the government, industry and regulatory bodies have percolated downstream in the economy boosting confidence in the ‘Self Reliant India’ drive. Owning a house is no longer just a dream; it has instead emerged as a basic necessity for reaons of safety and security — there is a new sense of urgency to own a house. The trend of millennials turning into the first-time homebuyers along with current homeowners upgrading to larger spaces as a matter of luxury or with a view to accommodate new activities like working or studying from home as well as maintaining fitness in the long run.
The sentiment has turned positive as a result of the incentives offered to sustain demand. Measures like interest subvention under the CLSS scheme, deal sweeteners by developers, reduced stamp duty, low interest rates, ready reckoner on circle rates and a wide choice of apartments available continue to allure fencesitters and convert them into actual homebuyers. The record number of property registrations in February is an outcome of efforts by all stakeholders in the Indian real estate sector.
