The clouded outlook of real estate is a result of the harsh pandemic situation India is facing today. Commercial properties are feeling the heat of the intensified work-from-home culture.
According to industry experts, restrictions in the major real estate markets like Maharashtra and NCR will lead to a delay in projects as many workers did a home rush. Diminishing supply will support property prices in the next few quarters.
Low-interest rates are said to encourage people to invest in homes with low-density, plotted developments in gated communities with shared, well-managed infrastructure, but credit stress among developers is expected to continue. Distressed real estate may emerge as a separate category.
With the help of the government’s credit-linked subsidy scheme, the demand may recover faster for affordable housing and mid-priced homes.
The government extended the deadline for the benefits on the purchase of affordable housing by another year, to March 31, 2022.
As remote working has encouraged people to buy houses in their hometowns, the demand is expected to be better in smaller cities.
“This has been on the back of low home loan interest rates, stagnant residential prices, lucrative payment plans and freebies from developers and government incentives such as the reduction of the stamp duty in states like Maharashtra and Karnataka (for affordable housing),” said Samantak Das, Chief Economist, and Head Research & REIS, JLL.
If the impact of the second resurgence is not a prolonged one, in 2021, the housing demand is said to return to 2019 levels.
“Given the current situation, new launches are expected to get delayed as we recalibrate the approach to suit the current times but we are working towards completing existing projects,” said Rohit Poddar, managing director, Poddar Housing and Development Ltd.
He said that the revised stamp duty since April 1 has hit the demand but the pandemic had made people realize the importance of owning a house.
Mohit Goel, CEO, Omaxe Ltd said “If lockdowns continue for a long time, the sector will feel the pain. There would be fewer launches and sales. Delivery may also be impacted.”