Infomerics report says around 58% people consider property as a mode of safe investment, with a notion that the prospects for real estate are likely to get an upswing once the pandemic recedes.
MUMBAI, Nov 23 (The CONNECT) - After being hit hard by COVID due to scarcity of labour and low budget spending, India’s real estate industry is now gathering pace and is on course for a healthy recovery.
The Indian Real Estate industry is currently valued at $200 billion, and it is expected to surge to $650 billion by 2025, a report titled Real Estate Industry: Outlook and Challenges released by Infomerics Valuation and Rating Pvt Ltd.,
Bengaluru, Chennai, and Delhi NCR recorded largest recovery in the September 2021 quarter, but the report suggest that the Mumbai realty market is going through a slow revival.
The report by the SEBI-registered and RBI-accredited financial services credit rating company, suggests that 80% of the prospective homebuyers are looking to purchase a house within the next three months.
But the Mumbai real estate market has gone against the national trend as the city has witnessed 55% decrease in spending propensity, which is highest among all the cities in India.
The commercial segment which is relatively a more formal segment, with big players involved, has seen an influx of investment. In office space segment, Bengaluru, Chennai, and Delhi NCR recorded largest recovery in the September 2021 quarter. The Information Technology (IT) remains the largest consumer of space during the quarter, occupying 34% of the space transacted.
With regards to gross office leasing of commercial properties, Mumbai registered 1.45 million square feet in Q2 2021 against 2.96 million square feet in
Please check details in PDF: Real Estate Industry: Outlook and Challenges
Q1 2021. This slowdown is the result of low base effect from previous quarter on Year-on-Year (YoY) basis.
Despite the market uncertainty due to the ravages of the COVID 19 pandemic, the Indian office outlook remains bright due to strong fundamentals and investment attractiveness, which has gained momentum during the COVID times due to reduced prices and the availability of greater options. Moreover, with increased vaccination, people are likely to return to office given the backlog nitty-gritty of working from home model.
Transactions across the major markets increased by 39% year-on-year (yoy) in the latest quarter. Overall, in H1 2021, transactions were down by 29% YoY when compared to pre pandemic levels.
Government intervention likes affordable housing scheme, tax deduction on interests on housing loans and attractive home loan interest rates offerings from PSU/private banks have played an active and essential role in revival of the Indian real estate market.
Affordable housing has been a boon for sunrise markets like Chennai, Hyderabad but Mumbai, which has the highest realty rates per square feet in India remain unimpacted. Amidst Covid-19 pandemic uncertainty, investors stayed away due to the uncertainties in the property market. In 2019, around ₹1.59 trillion worth of luxury housing stock was unsold, which accounts to around 34% of the total unsold homes across top residential markets.
Further, the report also mentions that the possibility of the third wave of Covid 19 and the emergence of delta variant, however, causes concern for the industry.
About 88 crore people are expected to live in urban areas in India by 2051 as against the current 46 crore people. Therefore, this trend setting pattern is sure to be salubrious for the real estate industry along with government interventions and new schemes rolling in in urban house spacing. Moreover, around 58% people consider property as a mode of safe investment, with a notion that the prospects for real estate are likely to get an upswing once the pandemic recedes.