Over the last 12 challenging months, the real estate industry has gone through some major transformations. The pandemic forced us to halt our construction operations, our procurement business took a blow and many of our customers had to face the burden of EMI payments despite serious downsizing in their organizations. Guess who came to the rescue? It was the Government. The Reserve Bank of India (RBI) announced a home loan moratorium till August 2020. Later, the Govt. of Maharashtra announced a reduction of stamp duty to 3% till December, 2020 and to 4% till March, 2021.
Looking at the positive side of the pandemic, one huge takeaway from the whole phase of lockdown was the reduced interest on home loans and stamp duty charges. Adding a silver lining to this was the festive celebrations by the end of December, 2020 which boosted the sales. The record-breaking sales figures were achieved because of the stamp duty reduction for a limited period which allured the customers.
The Reserve Bank of India (RBI) injected liquidity of INR 3.74 lakh crore along with the moratorium on all term loans by financial institutions to help relieve short-term liquidity concerns and support the real estate developers, as well as home buyers. Real estate developers were sitting on an unsold inventory worth nearly INR 6 lakh crores, as of September 2020, according to PropTiger.com data.
A report by Knight Frank India in December mentioned that the massive 60% reduction in stamp duty by the Maharashtra Government witnessed the registration of residential properties in Mumbai jump over two-fold in December to 18,854 units. It was a noteworthy game-changer for higher sales in two key markets - Mumbai Metropolitan Region (MMR) and Pune during the last couple of months in 2020.
Real estate in the commercial segment has also observed a rigid curiosity from various sectors including technology, banking, financial services, research, and consulting.
The introduction of Work From Home (WFH) concept gave birth to flexible workspace needs. The workplace will be more than just a single location. It will be an ecosystem that’s driven by locations and experiences in order to support convenience, functionality and wellbeing.
According to JLL, net leasing of office spaces dropped by 50% in the quarter of July to September 2020, across seven major cities to 5.4 million sq. ft. During the January-September period of 2020, the net office space leasing fell by 47% to 17.3 million sq. ft from 32.7 million sq. ft in the same period in 2019. The WFH concept contributed to the fall in demand for office space.
In 2020, the average per sq. ft value of property prices in Pune stood at INR 6,573. While new launches may have plummeted, the scenario is somewhat different in the luxury segment.
According to a report submitted to the Parliament, over 10.75 lakh houses have been constructed under the Pradhan Mantri Awas Yojana (Urban) during the COVID-19 pandemic so far, and Uttar Pradesh tops the chart with more than 2.55 lakh such units, whereas Maharashtra has constructed more than 1.1 lakh homes.
Don't forget to book your home before 31st March, 2021 to avail the stamp duty benefits.
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