Demonetization, GST, and RERA were all disruptive in their own right. The real estate industry staggered under the weight of changing norms and pinned its hopes on 2020 for a period of healing, recovery, and growth. But things didn’t pan out well as the entire world came to a standstill due to the global pandemic. Apart from anxiety and uncertainty, it also crippled the global economy. Real estate too was hugely affected as 40-50% of business in the residential segment was shaved off in this period. Luckily, things started looking up with the onset of the festive season.
Financial institutions and banks too softened their blow by reducing the interest rates on home loans to about 7%. Real estate developers seized the opportunity and opened a treasure trove of offers, discounts, and loan repayment plans to discerning homebuyers. It was also the time when a reduction in stamp duty was announced. Pune and Mumbai Metropolitan Region (MMR) markets saw a surge in demand and the once dormant customers were now ready to dip their toes into the real estate waters.
As real estate developers look forward to 2021 as the year of revival, we give you a sneak peek into what’s hot and what’s hotter.
Low interest rates will induce growth
Everything eventually boils down to money and with home loan rates on a historic dip, home buyers are definitely going to see the wisdom in investing now. The movement is particularly strong in the affordable housing segment where buyers are looking for properties that do not break their budget and yet give them the pride of ownership. Explains Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman, National Council on Affordable Housing, ASSOCHAM, “The market for affordable housing is robust, and in the coming months, there will be more movement. People have realized the importance of owning a home, and this feeling is going to persist. We are coming up with multiple projects, and the response that we are getting is an indication that the affordable housing segment will not face any problem.”
Market will remain competitive for buyers
Developer discounts created a bit of a spurt in demand in real estate in 2020 and stamp duty waivers gave it further impetus. The pandemic meanwhile gave people new perspectives about life and living. The inclination to stay in a self-owned home is stronger now. Buyers want a home they can call their own especially since work-from-home will continue. The commute is therefore no longer a concern, having a house replete with daily comforts is. Buyers now want to know what amenities will the house come with, will it have a play area for kids, will there be a gymnasium for workouts, and are there grocery stores and other conveniences in the vicinity. The concept of ‘everything inside’ is now taking root and everyone wants everything they need right where they are.
Suburbs become a huge draw
While prime and prominent locations always stole the limelight, the suburban areas are now seeing greater momentum. Areas like Wakad, Ravet, Punawale, Tathawade, Moshi, etc are all seeing a huge demand for their housing properties. With travel to work out of the equation for now and social distancing still prevalent, affordable homes in suburban areas are witnessing an upward trend.
Developers go digital
Lockdowns and social distancing also brought the builders’ community online. They are now leveraging virtual tools to offer property tours, videos, and photographs for quick viewing. Online searches have grown considerably and developers are more than happy to show what they got without much ado.
Government support will help the revival
The government is also playing its part perfectly well to help revive the real estate sector. The invoking of the ‘Force Majeure’ clause under the RERA to allow 6-9 months extension for project completion, the extension of interest subsidy for the middle-income group, and enabling the sale of homes worth Rs. 2 crores with a 20% discount to circle rate by relaxing tax rules are all important steps taken by the government in the favor of the real estate sector. Only time will tell how things will pan out post the new budget. But for now, it’s safe to conclude that all the steps taken by the government and the Reserve Bank of India have ensured an upsurge in demand for real estate.
Luxury homes will steal the thunder
Following the reduction in stamp duty charges, luxury homes saw significant growth in demand in Mumbai, Pune, and other metros. High-value home transactions are soon becoming normal as buyers continue to see the value in investing in a lavish home in the current favorable weather for real estate investments. A 40 percent growth in revenue is expected in this fiscal year on properties valued above Rs. 5 crores as changing needs due to the pandemic drive buyers to the luxury homes segment. The growing interest of NRIs is also a contributing factor to this growth.
The new normal may pose many challenges to us, but it has also ushered in fresh opportunities especially for the real estate sector. The market is slowly gathering pace and there is considerable demand for affordable as well as lifestyle housing projects. Pharande Spaces’ elite project Vaarivana, for instance, saw a remarkable increase in bookings in the last fiscal quarter. Their projects in the PCMC area are also garnering considerable attention and footfalls. All in all, it’s safe to conclude that 2021 will set the tone for happy times for both buyers and real estate developers. All we can say- ‘Wish you all a very happy home!
Visit www.pharandespaces.com for more details.
About The Author:
Akash Pharande is Director of Pharande Spaces, a leading construction and development firm that develops township properties in Western Pune. Pharande Promoters & Builders, the flagship company of Pharande Spaces and an ISO 9001-2000 certified company, is a pioneer in the PCMC area offering a diverse range of real estate products catering especially to the 42 sectors of Pradhikaran. The luxury township Puneville at Punavale in West Pune is among the company’s latest premium offerings. Woodsville in Moshi is another highly successful PCMC-based township by Pharande Spaces which is now in its 3rd phase.