The last year has disrupted our lives in many ways. The pandemic has changed our priorities and influenced our decisions. The real estate sector also went through similar uncertainties before it started to see a rise again. Lockdown definitely affected the market. But real estate agents and companies came up with solutions to keep the ball rollin
Online meetings and virtual home tours are now becoming a regular feature. However, the sudden spike in the cases has brought a fresh round of doubt and confusion.
The head of CREDAI feels that this could put the real estate demand off track again. Yet, the good news is that those buying property will not be delayed for long. The country-wide vaccination drive is giving people the confidence to go ahead with their decisions.
Residential and Housing Real Estate
The latest RBI decision to keep the repo rate at 4% has allowed people to get a home loan for 6.5% per year compared to 8% in January 2020. The online searches for homes for sale have increased. People want to take advantage of the pandemic and the reduced loan interest rates. It becomes easier to buy a suitable home.
The rating agencies are revising their forecasts. The housing sector is doing better than their earlier predictions. This is good news for real estate, isn’t it?
Whether it is flats in Gurgaon, or luxury apartments in Bangalore, as long as the migrant workers are on the site, the work will continue. Buildings will be completed, albeit with a few delays. The latest lockdown in Maharashtra has resulted in the migrant workers moving back to their native states. It might affect the flats in Pune to an extent.
ProTiger.com conducted a survey that showed a 68% quarterly increase in home sales from October to December 2020. Considering all that the country went through due to the pandemic, this increase comes as a positive sign. However, the short-term might see not-so-good results as things slow down.
Business Real Estate
The other side of the real estate coin is the business/commercial space. This one seems to be seeing a little more slump due to the extended Work From Home (WFH) policies adopted by various companies. Workspace leasing has gone down by 50% between July and September 2020. Real estate news showed that the overall trend last year has been negative. It is said to continue this year as well. Companies are planning space consolidation and optimization of resources to reduce operating costs.
However, things are not going to be bleak in the long run. Companies are expected to bounce back and invest in office spaces, warehouses, etc. Some have already begun to do so.
Prestige Group is currently building commercial spaces in Chennai. It has fortunately made a name for itself in the South Indian real estate market. Whether it is residential or commercial, Prestige Group is striding ahead.
Brigade Group is another example of real estate companies making huge investments in housing and office spaces. They want to be ready when the market takes off, and the demand increases.
Technology will become more critical than ever if a real estate company wants to survive in the market. More people are now recognizing the importance of having a home with the latest features and amenities (to facilitate stress-free WFH). The real estate sector has enough incentive to complete the pending projects. But before that, the real estate sector has to sustain and overcome the slump in the short term.
