With the affordable housing push from the government of India through Housing For All programs (PMAY), realty sector has registered a flood of affordable housing projects. The government has extended several financial benefits to promote affordable housing projects in India, such as subsidy and providing special credit for affordable category home buyers. Amid lockdown, there is a sudden change in buying pattern has been witnessed and interest of realty investors and home buyers shift towards mid-segment properties.
The coronavirus induced crisis and lockdown, as a result, have almost paralyzed the on-ground activity of real estate sector. The industry is witnessing severe liquidity crunch, but the central bank and government of India have addressed several issues simultaneously to ease the liquidity flow. The RBI has infused INR 50,000 crore specifically for the real estate sector and reduced reverse repo rates to ease liquidity so that banks & NBFCs could lend more.
Several online sellers and certain developers are able to manage sales of Online Real Estate properties amid lockdown. Through looking at sales figures, a seismic shift of realty investors and home buyers towards mid-segment properties has been witnessed. Most of the residential properties sold during lockdown were in the price range of INR 65 lakh – INR 1.2 crore. Around 49% of residential properties sold in Mumbai-MMR (Mumbai Metropolitan Region) were in mid-segment priced housing units.
Delhi-NCR (National Capital Region), Pune, Hyderabad and Bengaluru realty markets are also registered similar trends, where mid-segment budget properties were the first choice of investors and home buyers. The total sold residential properties among top seven housing markets amid lockdown, with 56% were mid-segment priced properties followed by others. Most of these mid-segment housing units are ready-to-move stage followed by under-construction stage residential properties.
According to Square Yards Research, 76,800 units which are around 11.5% of total unsold inventory at the end of Q1 CY20 across top seven realty markets are ready-to-move housing units. Currently, several banks are offering housing loans in the range of 7.15% – 8.5% interest rates.
The abundance of ready-to-move residential properties and favorable housing loan rates helped online sellers and certain developers to sale housing units amid lockdown. It is well supported by certain special lockdown offers and discounts to lure investors and home buyers also. A swift transition from onsite to online with quick adoption of several technologies made online transactions of real estate possible amid lockdown.
Recently, government mulls to lower the GST (Good and Service Taxes) for the realty sector to tide over coronavirus crisis and lockdown. The lowering of the GST and the special relief package will ease liquidity pressure on the real estate sector, which is struggling with a lack of cash.
Multiple measures of the government and central bank will uplift the consumer sentiment and post lockdown, probably industry will witness a spike in residential properties demand from the present level of demand.
Going forward, mid-segment residential properties with ready-to-move status will be preferred by realty investors and homebuyers over new-launch and under-construction housing units. The prevalent uncertainty in the realty market is the prominent reason behind this change in the budget segment buying pattern of Online Residential Properties amid lockdown.
