Real Estate Industry 2020 & 2021. Synopsis so far…
2020 was meant to be the year of recovery for the Indian real estate sector, especially the housing segment. After three years of business disruptions caused by demonetisation, implementation of GST and the realty law RERA, and the NBFC crisis, the market had started stabilizing.
COVID-19 global pandemic hit India, forcing the government to impose a national lock-down whereby bringing more pain and distress in realty sector, shaving off 40-50% of business in the residential segment from an already low base.
In the beginning of 2020 business ran as usual for the first two months of the year, and then came COVID-19 leading all the real estate activities to standstill for next seven months though the economy started unlock in the month of June 2020, the situation remained grim through September as construction activities were stalled because of labour paucity, while sales were down on account of concerns over economic growth. The threat of job losses loomed large, which had a major dampening effect on consumer sentiment.
Housing sales begin to improve from October onward’s after introduction of several relaxations and benefits offered for revival of the largest sector of the county (Real Estate).
The softening of interest rates on home loans to around 7% and rock bottom housing prices coupled with attractive special offers from cash-starved developers were positive factors that paved buyers’ return to the market, albeit at a slower pace. Reduction in stamp duty on registration of properties in Maharashtra was a definite game-changer.
It was a significant catalyst for higher sales in two key markets — Mumbai Metropolitan Region (MMR) and Pune during the last three to four months of the year. This trend continued as the stamp duty cut was applicable up-to March 2021.
Scenario Post March-2021 – Withdrawal of Stamp Duty concession by Maharashtra Government led to a slow down in sales post withdrawal.
No extension for Government brought down sales inquiries and visits substantially, now comes the situation when industry was struggling to revive and there comes a second wave(COVID-19) from mid of April 2021 Semi Lock down is imposed which may continue till end of may 2021 there by allowing market to progress at a snails pace.