Indian Market Today: Here’s Why Housing Sector Is Recovering
There isn’t any sector that remained untouched by Covid-19, and talking about the Indian market today, specifically the real estate industry, it had its bumpy experiences due to the pandemic.
However, housing Secretary Durga Shankar Mishra pointed out that though India’s real estate might have seen a bad phase in the first and second wave of the Covid-19 pandemic, the changing lifestyle patterns have again revived the housing demand in the country.
Apart from a lifestyle change, the easy Indian government schemes and economic policies like lower interest rates on home loans and some steal deals have primarily become why the market has witnessed significant growth in India’s real estate industry.
Under Pradhan Mantri Awas Yojna by the Union Ministry Of Housing And Urban Affairs, the government aims to build 20 million houses in urban areas across the country by 2022. It will be a significant boost to the growth of the residential sector leading to the increase in demand for commercial and retail office spaces.
As per the recent Financial Stability Report by the Reserve Bank Of India, the unsold stock levels have gone down drastically in the last four quarters to approximately seven lakhs, as of March 31, 2021, from around 8.5 lakh in the first quarter of FY21. Fortunately, the launches of the new units have gone tremendously up to over six lakhs in the last four quarters of FY21.
Prashant Thakur, Director & Head – Research, Anarock Property Consultants, says, “ready to move-in homes are now the most compelling option for homebuyers in MMR and Pune.” As a result, he further adds that Maharashtra has been the first to announce a cut in prices.
Emergence Of New Work From Home Culture Has Changed Indian Housing Market
The housing sector in India is still undergoing a tremendous transformation and continuous changes in Govt. policies, recovery from the pandemic, Covid cases, normalising economic activities, and all of these have directly affected builders and buyers.
Around 50% of the homebuyers are willing to buy their dream house in the next six months. As per online research reports, Bengaluru and Chennai have seen some early recovery signs in the housing market of Southern India.
Owning a house has become the top in the list of essentials for many Indians. People are now looking for clean, peaceful, modern housing facilities due to progressive and new working trends from home. Moreover, people are getting used to dedicating a part of their house to office-related work.
Even after the severe lockdowns and Covid restrictions, developers have still launched various new projects digitally. As a result, developers came up with nearly 36,260 units on the market across the top seven cities in the second quarter. Hyderabad took the lead with around 8,850 units launched at the beginning of the quarter of 2021, followed by MMR with 6,880 and Bengaluru with 6,690, says Anarock, the real estate consultant.
The latest Q1 2021 report by India’s leading independent real estate services company, Anarock, talks about the increase in the sales of homes in the top seven cities in the country in Q1 2021, which has exceeded Q1 2020 by approximately 29% at 58,920 units. Moreover, it has been recorded considerably higher than pre-Covid levels, which signals almost a significant economic rise.
Covid Has Changed Our Priorities
Covid has changed the way people live, think, spend, eat, work and enjoy. Everyone wishes to feel safe, and now there is a strong realisation of how important it is to have your own house. It has led to an increase in housing demand in India.
Managing Director & CEO of LIC Housing Finance, Y. Viswanatha Gowd, states, “In a post-pandemic world, the necessity and comfort of a personal space have driven many individuals to advance their home buying decision.”
Furthermore, the home loan now starts from 6.66% for loans up to Rs. Fifty lakhs for salaried individuals. And this is probably the lowest housing loan interest rates with a maximum tenure of 30 years. “We hope that this reduction in home loan interest rate will further boost customer confidence and help in early revival of the sector,” said MD & CEO Of LIC Housing Finance.
Due to the tremendous increase in the cost of raw materials for builders, there has been anticipation for average Indian house prices to go up to 4.5 % next year and 5.5% in 2023.
The Factors That Have Given Wings To The Real Estate Market In India
- • Fall in the interest rate
- • Stamp duty rate reduction
- • Revised registration charges in many states
- • The repo rate remained at 4%
- • Revised economic policies of India
- • Less Covid cases
- • Increased vaccination rates in the country
- • Improved status of the job sector
- • Resuming economic activities
- • Ease of restrictions
- • Affordable prices for properties
- • Witnessed higher household savings than pre-pandemic levels
- • Several banks have cut the home loan rates to come at par with the competitors
- • Work from home and study from home culture
Indian Housing Market: The Bottom Line
With Covid Cases in control and with ongoing successful vaccination drive in the country, it seems the better times are waiting in the coming years. The realty sector will witness a different market of more progressive buyers and builders. All in all, the Indian builders and homebuyers are slowly coming back on track. It’s a positive sign for the revival of India’s housing market.
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