The year is drawing to a close and wisps of optimism can be seen in the air. Economies are slowly swinging back to normalcy with key sectors including real estate making stately progress during Q3. The whiff of the Covid-19 vaccine is getting stronger by the month, pushing projection curves uphill as India looks to ride out of the storm and tread towards a brighter future.
Post pandemic, all eyes are on the property sector’s performance. Being the second-largest employer of the nation, the revival of the real estate sector is expected to give a significant push to the overall economy. The housing market had shown great character and resilience in the wake of the pandemic, taking the brunt of the nationwide lockdown with steely determination.
Tapering property sales, drying liquidity, flagging demand for homes, and delayed launches hounded the property sector as it sat idle for months gathering dust. The challenge for real estate developers was to preserve value across each portfolio, repair snapped financial lines and enable business continuity, by weighing the risks that lay strewn in its path.
The accommodative financial stimulus, incentives and handholding provided by the government, ensured smooth online transactions. Online real estate portals are buzzing with activity and buyer sentiments have got a boost. However, a question still revolves around in our minds. Will the resilience of the realty sector stay or taper off in 2021?
Need for acceleration in affordable housing
It is no secret that affordable housing has been the launchpad for the real estate sector towards high-octane festive sales post-pandemic. People needed capacious homes and greenery within affordable price points and real estate developers ensured to fit this puzzle piece with stunning pre-payment plans, deferred payments, stamp duty cuts and other appetizers.
Homebuying sentiments are at their zenith as buyers are wary of the importance of owning a home. Low-interest rates, property price corrections and tax cuts have pulled fence-sitters from the side-lines and guided homebuyers away from taking the rental option.
The market is for the buyers, and those who are unshackled by the uncertainties of the job market will throng real estate marketplaces. However, realtors should make sure that this response from homebuyers doesn’t fizzle out as they enter 2021. They have to fill the gaps in terms of timely implementation of projects and come out right on their promises. Affordable housing projects in low-density suburban areas should be accelerated since they bode well for investors looking for good ROIs.
Clearance of inventory overhang to be expedited
The ginormous demand for homes post-pandemic was a huge sigh of relief for realtors, worried about the future of the property market. Homes did sell in huge numbers, but estimates were overshadowed by 2019 housing sales figures.
One of the main reasons for this was an inventory overhang that had plagued the residential market due to delayed possession, liquidity crunch and stalled projects.
Realtors need to offload their existing inventory to cater to the surge in homebuying by taking haircuts and reduce apartment prices, making near-finished homes market-ready and inducting construction tech to expedite under-construction projects. This will also help clear off both bank and non-bank lenders’ balance sheets and bring huge cashflows for new housing projects that will auger well for the residential sector.
Rise in property prices to be checked with new inventory
Overpricing is one of the main culprits that has kept the Indian housing market under strain for years. Homebuyers in India are sensitive to higher property prices and a bump can affect consumer sentiments during this pandemic.
It’s likely that homebuyers will make full use of lower interest rates, stamp duty cuts and property price corrections and book their dream homes. 2021 will witness a huge growth in job opportunities.
As a result, ready-to-move properties in all segments will see higher demand. There will also be demand for theme-based real estate projects including comfort homes, retirement homes etc. So, to ensure that home buyer sentiments remain high and property prices remain stable, real estate developers have to add new inventory to the market during the first quarter of 2021.
This will steer the housing market towards positive growth, make it self-reliant and offer great opportunities for both investors and end-users. At the end of the day, luck is on the side of the residential real estate market and it will enjoy positive sentiments from homebuyers in the coming year, only if it prepares itself well for the challenges ahead.
