Spurred by record low interest rates, stable housing prices, stable employment scenario and growing homeownership sentiment, residential sales and new launches have surged in recent months. As per a recent report by PropTiger.com, for instance, home sales and new launches have both shown a significant improvement during July and September 2021, indicating that a turnaround for the realty sector might be around the corner.
In fact, a total of 55,907 new housing units were sold in India’s eight leading markets during the three-month period, showing an upswing of 59% when compared to the same period in 2020. Likewise new supply also saw a remarkable upswing in Q3, showing a three-fold jump of 228% to 65,211 units when compared to Q3 2020.
Knight Frank India’s Real Estate Update (July – September 2021) has also revealed that housing sales volume across the eight major cities of the nation grew by a considerable 92% YoY to 64,010 units, while new residential unit launches increased by 90% YoY to 58,967 units in Q3 2021.
These reports indicate that the second wave of pandemic has had a limited impact on housing sales and new launches across the country, mostly because the sector was better prepared this time. Also, with the festive season in full swing and consumer sentiment at a record high, industry experts and developers are expecting housing sales to gain further momentum.
“Home sales across the country have surged significantly despite the pandemic. Homeownership has become a priority, with businesses focusing on remote work – and homebuyers’ need for bigger spaces. This, backed by the government’s initiatives to make housing affordable for all, has aided a strong recovery for the residential sector across the country. With the government’s mass vaccination initiatives, we can expect further growth in the residential sector in the festive season,” says Gaurav Kumar, Managing Director, Capital Markets & Residential Services, CBRE India.
“Historically, the festive season in India has always been considered an auspicious time to make home purchases, aided by lucrative schemes by developers. This, coupled with reduced interest rates, can be expected to further boost demand for housing properties in this festive season,” adds Kumar.
Industry experts say the festive season has always been the harbinger of increased sales in the Indian realty space. Despite the second wave of COVID-19 pandemic hitting the sector hard, the sector is buoyed as there is a pent-up demand for owning homes, banks are offering home loans at attractive interest rates and thereby the spending capacity of the middle class homebuyers has also improved.
Ashish Narain Agarwal, Founder & CEO, PropertyPistol.com, says, “The consumer sentiment is at an all-time high this year as people have realised that owning a home with better amenities is more important than ever. The sector has also been witnessing consolidation and large corporates are looking at opportunities to leverage business in the realty space in India. The trust and confidence from home buyers earned by the corporates will further add up to the growing demand for homes and thereby improve the sector immensely not just during the festive period but otherwise too.”
Going by the current trends, developers too are bullish about the growth prospects of the realty sector during the festive season.
“Unlike the previous years, this festive season is expected to see a paradigm shift in the psyche of the Indian buyer, who is more cautious, however, smarter than before and plans strategically before investing. Thus, the eyes are laid on the real estate sector, which has seen a significant increase in the residential sales despite spiralling Covid-19 cases and is expecting a jump in sales in the festive season. However, in contrast to the previous years of an impulse purchase, this year will be regulative to the pocket strings of the buyers. The trend and efforts by the developers along with the sudden pique in the interest of investors in real estate clearly indicate a positive outlook for the RE industry this festive season,” says Karan Kumar, CMO, DLF Ltd.
Pankaj Bansal, Director, M3M, says, “With people being confined to homes in the new normal for a long period, the demand for homes with ultra-modern amenities will undoubtedly catapult in the festive season. In the offing, we have planned low rise developments (2.5 bhk and 3.5 bhk) with all the benefits of a condominium which basically means a low rise format but with all the condo features like security, open landscaped terraces, new age tech features. In the commercial segment, we are providing pre-leased investment opportunities with attractive propositions like 9 years lease, 3 year lock-in period, in one of the largest mixed-use developments – M3M Corner Walk, in SPR that we have just delivered and also signed up more than 200 leading brands.”
Mohit Goel, CEO, Omaxe Ltd, says, “Factors like all-time low home loan interest rates, bottomed-out real estate prices, discounts and government incentives have given wings to homebuyers to fulfill their dreams. This in turn has given a boost to the real estate sector not just in metros but in state capitals and tier 2/3 cities also. The positive market sentiment coupled with the festive season also bodes well for the sector.”
Developers believe that this festive season against the backdrop of the regaining momentum of economic activities augurs well for real estate. The economic fundamentals are already strong, marked by a swift revival in demand, aiding the recovery of some segments.
“We foresee the festive season to set the pace for buoyant demand in the residential segment in the coming quarters. The festive season has undoubtedly uplifted the consumer sentiments in the residential sectors. For instance, our flagship project – Krisumi Waterfall Residences, located in Sector 36A Gurgaon, off NH-8 – has witnessed a surge in inquiries and footfalls in the past few weeks. At Krisumi Corporation, we have come up with lucrative offers such as a complimentary golf session at ITC’s Country Club & resort, a gold voucher worth Rs 2 lakh, an ITC Gift Voucher on every booking for a limited period, to make the festive season even more special for our patrons,” says Ashok Kapur, Chairman, Krisumi Corporation and Krishna Group.
Mukul Bansal, Director, Motia Group, says, “The real estate market has done well in the previous quarter and is expected to maintain its growth momentum during this festive season as well. At present, several favorable factors are playing their role in encouraging first-time home buyers. Various offers and schemes have been rolled out during the festive season for them. The growth pattern is not only witnessed in the metro cities, but tier 2 and tier 3 cities are also getting increased traction.”
Notably, along with the residential space, some segments of the commercial space have also started gaining pace post the pandemic.
“With strengthened consumer sentiment and buoyancy in the market, the real estate sector is quite optimistic during this festive season. The sector has been riding strong for the last couple of months and is likely to maintain this momentum. The office space segment has been gaining traction from IT/ITES, BFSI, startups and boutique companies. Amidst the trend of work from home, hybrid model, flexible office space and other possibilities, various companies are mulling over their expansion plans and bringing workforce back to office. This indicates positive signs for the demand of grade-A offices and flexible workspaces,” says Abhishek Pandey, Vice President-Customer Engagement & Distribution, Viridian RED.