2020 definitely has to be a forgetful year for almost everyone. The lockdown phase has affected people across the demographic strata from the elite class to the poor. Be it for restrictions on air travel or inability to get access to essential needs, the year (and the virus) certainly hasn’t discriminated in causing maximum trouble to the common man. The businesses had to face the brunt of the lockdown with people locked down in their homes; some unable to go back home; some homelessly spending gruesome nights in the rains; while some flagrantly roamed the streets causing more panic and leading to more rigid rules. While some showed their support by obeying the curfew, banging plates from their balconies, clapping, and lighting lamps; some showed their support by contributing essential services to the needy. “Home” was one place that most of the people, either lived in, or worked in, or did both, in 2020.
The real estate industry has been on a tremendous roller-coaster. Though most of them didn’t quite enjoy the ride, the adverse effects of the pandemic are already being felt across the globe. When the lockdown was announced, several construction workers went back to their home towns. The construction work was halted and the sales had also come to a standstill. Data by PropTiger shows that housing sales in India’s eight major cities declined by 66% in the period between July-September 2020. Delivery of existing projects were pushed ahead of their promised possession time, and people who had already bought a home, were unable to pay the EMIs because some organizations had begun downsizing and people were losing their jobs at an exponential rate. This issue had to be addressed somehow. That’s when the Maharashtra government announced a reduction in stamp duty from 5% to 3% till December 2020, and to 4% from January 2021 to March 2021. In 2019, the real estate market garnered up to INR 43,780 crore (USD 6.26 billion) in investment.
The government has allowed FDI up to 100% for townships and settlement development projects, 60 million houses will be built, out of which 40 million will be in rural areas and 20 million in urban areas by 2022, under the Housing for All Scheme. Co-living market size across India’s Top 30 cities is expected to grow more than double to reach USD 13.92 billion by 2025 which currently stands at USD 6.67 billion. The real estate sector in India is expected to reach a market size of USD 1 trillion by 2030 and contribute 13% to the country’s GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for India's growing needs. The road ahead looks very promising as the Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform that allows all kind of investors to invest in the Indian real estate market. It is said to create an opportunity worth INR 1.25 trillion (USD 19.65 billion) in the Indian market in the coming years. Overall, there has been a major metamorphosis in the individual’s priorities because of the reduction in stamp duty and interest rates on home loans. Those who were having second thoughts on buying a home reconsidered their decision and this in fact helped the real estate businesses in boosting their sales. Many companies saw a considerable amount of sales which wasn’t possible if lockdown were still in effect.
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