By Mr.Shashank Vashistha, Executive Director of eXp Realty, India
The real estate industry is not new to challenges in the past few years but the last two years made things even more difficult for the sector. FY 2020-2021 was a watershed year with Covid-19 resulting in a crisis in the market and an economic downturn. Owing to the series of lockdowns and restrictions, there was a sharp decline in property demand, and construction activities and property transactions were brought to a halt which translated into price fluctuation. Both residential and commercial real estate markets were hit.
With the work-from-home concept and remote working becoming the norm, the commercial real estate footprint started shrinking. But all is not gloomy here as the market has taken several steps towards revival since last year. With the ongoing coronavirus vaccination drive across the country, the real estate industry has started to witness gradual recouping.
Government Initiatives
In an attempt to stabilize the ailing and volatile real estate market, the Government of India has taken requisite measures. GoI proposed a positive annual budget for the year 2021-22 to enable growth and has already made the move to facilitate investment in the Indian Real Estate Sector. Adding to the central government’s efforts, respective state governments too are playing an important role in putting the slumping sector back on the fast track post-Covid-19.
Last year, the Maharashtra government decided to slash down the stamp duty rates on the registration of properties / real estate transactions. Other states like Karnataka too followed the same model while the Centre lowered the GST rate. This attracted the customers to return to the market. The Reserve Bank of India also announced to offer some concessional schemes to aid the sector and lower the tax burden on buyers. As RBI continues to keep the repo rate unchanged at 4%, homebuyers can currently get home loans for as low as 6.65% annual interest. Taxpayers can also claim a deduction for the interest paid on the home loan. Additionally, the government also dedicated a stress fund of INR 25,000 crore for unfinished projects. All this led to creating a win-win situation for all the stakeholders in the industry.
The positive impact of the aggressive inoculation program rolled out by the government can also be experienced in the country’s real estate market. This has given people the confidence to return to cities. As a result of this surge in urban population, a substantial demand in the residential real estate market is created which is an indication of a favorable year ahead.
NRI Investment
Though it seems a difficult time for the sellers, for home buyers it is a golden opportunity. The last two years have taught people the importance of owning a property. Not only in owning but there has also been a visible enthusiasm and a significant increase in private investments. Eased investment norms have accelerated investor interest and have made the residential real estate market very lucrative for NRIs. HNIs and private investors see the distressed real estate market as an investment opportunity and put a lot of capital in this asset class. With the reduced value of the rupee against the US Dollar, and the deposit rates going down, cross-border investment has increased in the sector.
Promising Revival
Considering its panoramic view, Indian real estate is a very mature industry. It has successfully dealt with a lot of disruptions in the past and is not new to changes. This time too, though the process seems slow because of the aftermath of the pandemic, the recovery is certain. And with the anticipation of the third wave, we can expect a few more obstacles for the industry. However, with the steps taken by the government to boost a sustainable revival and facilitate further growth of the industry, we can expect to see positive results this year. All in all, going forward, the future of the industry seems promising.
Corporate Comm India (CCI Newswire)
