The Indian realty sector battled hard with regard to overcoming the COVID-19 challenge for 2020, aided by some help from the Government. Sales figures previously dropped by a whopping 80% in the quarter between April to June in the aftermath of COVID-19 as per the data provided by Square Yards, India’s foremost online real estate transactions platform. The RBI did help thereafter by reducing rates of interest on housing loans while the Government extended its credit linked subsidy scheme as well, by way of help. With pent-up housing demand, deals, some Government incentives and other innovations, the industry witnessed a slight recovery in the festive period towards year-end.
The Co-Founder and Chief Operating Officer at Square Yards, Kanika Gupta Shori, stated that real estate emerged from the nationwide coronavirus induced lockdown with sales figures coming down by 80% for Q1 and Q2 in 2020 in comparison to the same period in the last financial year. Developers then emerged with flexible payment options and alluring discounts for tapping into pent-up housing demand throughout the country.
As per experts, sales figures recovered from the month of October and also November (year on year) for cities such as Pune and Mumbai. This was majorly driven by the stamp duty cut by the Maharashtra Government in these cities. Sales figures will overall remain low as compared to earlier years in 2020 based on predictions of industry experts. The Government provided a few tax relief measures for helping developers cut prices while CLSS benefits were extended till March, 2021 for enabling affordable housing growth under PMAY. The lowest rates of interest in a decade for home loans also spurred pent-up housing demand. The developers also took the digital route towards convincing buyers to invest in real estate at this time. Leading players like Prestige Limited conducted virtual launches for instance while the Maharashtra Government okayed online registration for properties. Demand went up for property in tier-2 and tier-3 cities owing to WFH (work from home) becoming the new normal at most companies. Reports indicate decline of 47% in housing sales from the year 2019 with 138,000 units being sold in the year 2020 and a dip of just 2% in unsold inventory. New launches came down by approximately 46% to stand at 128,000 units. Prices are expected to stay muted throughout 2021.
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