As the pandemic instigated major lifestyle changes that forced people to stay at home for a long time, it acutely changed the way the spaces within the house were utilized.
In a paradoxical fate of events where everyone has been sceptical about investing in real estate due to the looming threat arising from the arrival of the second coronavirus wave, the industry bounced back with great momentum, taking the sales to the pre-COVID level within months of unlocking.
As the sudden arrival of COVID-19 deemed the sector unprepared, the industry experienced its share of highs and lows. Even though the second half of 2020 showed remarkable resilience, the year reached a new bottom where though the housing sales soared to 1.38 lakh units but correspondingly the new launches dipped down to 1.28 lakh units.
Considering the robust vaccination drive across the country, experts have shown confidence in the year 2021. They believe that the reviving trends of 2021 will drive the boom of the industry in 2023. It has been estimated that the top seven cities will experience favourable housing sales that will cross 3.17 lakh units and new launches will lead by 2.62 lakh units.
Owing to the low interest rates, experts have anticipated a bullish impact on the industry that has played an instrumental role in flipping the lulling effect of COVID-19. Likewise, it has also contributed to driving the sales in major cities of the country. The changing dynamics in favour of real estate, even amidst the unstable economy, could be attributed to the changing consumer sentiments that underwent modification due to the uncertainties of rental accommodation.
In certain ways, the global pandemic has come as a blessing in disguise for real estate, helping the industry establish its importance in the residential segment. Especially the millennials, who were earlier in favour of the rented house, have started showing great interest in buying their own home.
The rising demand for large houses instilled the faith in accommodation of own home. As the notorious pandemic instigated major lifestyle changes that forced people to stay at home for a long time, it acutely changed the way the spaces within the house were utilized.
There was a rise in spacious, independent options, where people could carry out all their daily activities smoothly. When remote working culture got adopted unanimously, people were on the lookout for homes with extra room or space, which could either serve as an office or study.
Moreover, as mobility got restricted to the house, people started searching for homes that accommodated entertainment, exercise and recreational area. Likewise, with the havoc created by the pandemic, there arose a dire need to purchase homes within the premises of hygienic surroundings.
Those in search of a new house strictly started taking into account the integrated development of the society with good infrastructure and civic amenities. As a result, the industry experienced a surge in demand for affordable, mid-segment housing.
Having understood the value for future security during uncertain times, real estate emerged as the financially reliable asset for investment, offering steady returns as compared to other risk induced volatile options.
Perceiving the revival potential of real estate, the government also came up with progressive policies to give a boost to the industry. In order to push the economy, the government took initiatives to reduce the tax incentives, providing a conducive environment to encourage home buyers. The low interest rates on home loans have invariably increased the affordability of houses.
Experts estimate that the low-interest rate is there to stay for a couple of years. Likely, it has opened new avenues for buyers to take higher amount loans which broaden their choices to buy bigger homes complemented by enhanced amenities and better lifestyle facilities.
These factors have contributed immensely to revive the fate of the industry even amidst the discouraging lockdown. As per recent data, during the third quarter of 2020, in the month of September, the Indian housing sector witnessed a strong comeback with sales and new launches accounting for 65% and 79% bounce back respectively. Where the experts were anticipating huge losses because of the pandemic, to their surprise, the sales escalated and reached the pre-COVID-19 level within a few months of unlocking.
Considering the panoramic view of the industry, the future of the sector seems rather promising. Taking a positive turn, the sales in real estate are expected to reach their peak in a couple of years.
(By Manik Anand, CEO at White Knights Realty)