Year 2020 for Affordable Real Estate
Pradeep Aggarwal, Co-founder & Chairman, Signature Global and Chairman, National Council on Affordable Housing, ASSOCHAM The year 2020 started with much hope as real estate sector was sailing through; the predictions for the year were encouraging with many pegging it at growing leaps and bounds. Suddenly, the brakes were put for several months as the global pandemic hit hard leaving many sectors and industries crumbling. However, only after a few months into the lockdown, it became clear that real estate, especially the affordable housing segment, will bounce back faster than expected. The green shoots were visible all through the lockdown as developers resorted to digital outreach programmes to ensure that they stay connected with the customers. The inquiries for the homes grew manifold, and many realtors were able to sell or book units using online channels. A lot many developers of repute reported huge sales during the lockdown, which improved once the Unlock was announced. Digital and schemes The year 2020 was the year for real estate when it used all the tools to help people realize the importance of a real estate asset. The year saw rainfall when it comes to using digital, innovative schemes, and lucrative offers. However, the affordable housing segment survived the onslaught merely due to the reason that it caters to the markets that have maximum demand. In fact, COVID-19 made fence-sitters to come forward and get hold of their own property. Government Interventions Real estate came out as a beneficiary of many measures floated by the Government of India. The year saw an unprecedented cut in repo rates, which led to the reduction of home loan interests that are hovering around sub-7%. Extensions were given to the developers to complete projects; funds were announced to ensure liquidity, and steps are taken that will help the stuck projects. The announcements of repo rate cuts by the apex bank during the lockdown have helped the reeling sector of real estate. Apart from the rate cuts, RBI has also gone ahead with measures such as rationalization of risk-weightage norms, restructuring of loans based on the projects, and linking home loans to LTV. The Recovery The real estate sector made a comeback in Q3 with sales and new launches rebounding to almost 70% of the pre-COVID-19 levels. The maximum sales were witnessed in Mumbai Metropolitan Region (MMR), National Capital Region (NCR), and Pune; all three regions accounted for almost 80 per cent of the sales in July-Sept quarter. The new supply in NCR was not much, but still, it contributed almost 15% of the overall launches that have happened this year. The biggest cheer came for the affordable housing segment, which comprised almost 70% of total new supply in July-Sept period across the major cities. Reduction of stamp duty charges in Maharashtra followed by Karnataka coupled with developers’ incentives and all-time low home loan interest rates became the catalyst of recovery for the real estate sector. Going Forward The market is promising, and with the apex bank being optimistic about the economic growth, the real estate sector would see a marked change in 2021. The measures taken by the RBI would help the sector reap rich dividends as the sector is riding high on the increased demand in post COVID-19 situation. 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.
Tags : Interviews Mumbai Real Estate Maharashtra Karnataka RBI Assocham Pradeep Aggarwal Signature Global National Council on Affordable Housing Government of India COVID-19