Despite the outbreak of the second wave of Covid and frequent semi-lockdowns in many states, 2021 is expected to witness growth in the housing segment.
The year 2020 was professed to be the year of recovery, for the real estate industry, especially for the housing sector. After three long years of slow business momentum caused due to demonetization, implementation of GST, and realty law RERA, the real estate market had just started to equilibrate.
All these forecasts and assumptions were hampered as the novel Coronavirus hit the Indian economy, taking the Indian real estate industry under its coil, just like all the other sectors. However, the rising concern regarding the spread of the pandemic compelled the industry to accept the new normal and adopt digitization.
With the second wave of the pandemic in 2021, organizations all over the globe are adapting to the new normal and are working from anywhere. This is resulting in excessive demand for affordable houses and workspaces with ticket size of Rs 35-50 lakh in Tier 2 and 3 cities/towns. This is one the causes for growth in prices and demand in those geographies.
Earlier this year, Finance Minister Nirmala Sitharaman announced some beneficiary measures for affordable and mid-range housing projects. Despite the recent outbreak of the second wave of the pandemic and frequent semi-lockdowns in many states, 2021 is expected to witness growth in the housing segment of the realty industry. This will improve and uplift the current scenarios of the residential segment.
Home Ownership as a top-most priority
In the wake of the global pandemic, people have now realized the importance of owning a property. The fluctuating nature of the economy resulted in many hardships for salaried employees, as they struggled to pay their rents, due to frequent pay cuts, employee lay-offs, etc.
Another consumer segment from which a huge demand is expected is potential home-buyers who prefer to move to sustainable housing societies, where their entire family requirements are met. Keeping in mind the current scenarios, such gated communities provide better social distancing facilities as compared to apartments.
People of the age group between 28 and 45 are contributing majorly to the demands of affordable housing in 2021. 2020 already witnessed major enquiries and bookings after the lockdown from this age group, and many of them are seen laying their hands on their possessions this year.
Govt initiatives for affordable housing in 2021
Along with the industry, the government has been trying to revive the realty industry for the last one year. In accordance with 2021 budget, the Union government succeeded in granting a boost to the affordable housing sector. Through Pradhan Mantri Awas Yojana (PMAY), the Central government attempted to facilitate the weaker sections of our society with affordable housing segments.
Affordable Rental Housing Complexes (ARHC) scheme, which is a sub-scheme under PMAY, also proved to be an aid for the urban poor population, as it aimed to provide a decent living standard to them. The scheme targeted urban poor and migrant workers providing them adequate living conditions and security.
Job security is projected today as the biggest concern during the pandemic. It has also influenced investments in realty industry, and people are investing in affordable housing for future security purposes.
With the economy picking up its pace and momentum and employees witnessing stability, improvement in real estate industry is expected. All segments are expected to experience renewed demands. Investors are expected to re-enter the markets in the second half of 2021, as the graph of property prices is expected to rise, resulting from the rising demand.
Due to the factors like low interest rates, unsold inventories because of construction delays and stress caused by the rise of Covid-19 cases, 2021 is seen as the best time to own a house as all these factors will majorly impact the property prices.
Currently, the sector is trying to revive its loss, by providing consumers with the best deals and convenient payment options to buy homes. Easy and trouble-free payment options will tempt first-time investors, and people looking for good investment opportunities will also seize the benefits.
(By Honeyy Katiyal, Founder of Investors Clinic)