The overall real estate segment in India has suffered a huge setback due to the pandemic. Since last year, the prices fell significantly but the material costs happened to rise. Distress selling of houses also pulled the market south. According to brokerage firm PropTiger, the housing market in the 8 major cities dropped by 16% in April-June, 2021 compared to 2020's same period and dropped by 76% than in January-March, 2021. Covid-19 second wave and recurrent lock-down made this fallout. Only in this year, from June-July period the market again started to gather strength. According to Housing.com, "Home sales and new launch numbers started to pick up in June when states began the gradual opening-up process." Yet, the market remained partially dry.
Better outlook for the real estate market
However, an estimation released yesterday by ANAROCK Property Consultants gives the market hope that the situation can alter very soon. The consultancy firm expects the market in "2021 may fare better than 2020". The present market trend is indicating that - 2021 is expected to witness an increase of 35% in housing launches and a 30% increase in sales over the previous year. Although 2021 was a peak year for the real estate segment in India, the builders and investors were slowly getting comfortable with the Real Estate (Regulation and Development) Act (RERA) back then.
The firm also added with anticipation, "In fact, the housing market in the top 7 cities is likely to attain a new peak by 2023, when housing sales are estimated to cross 3.17 lakh units and new launches by 2.62 lakh units during the year." Mumbai and Bengaluru are all set to lead from the front with maximum housing sales and new launches in 2023. Mumbai is expected to comprise a 28% share of total sales and nearly 30% of new launches, while Bengaluru is estimated to have a 20% share of homes sold and a 17% share of units launched. With that, the NCR may comprise an 18% share of sales and 15% of new launches. However, Kolkata, Chennai and Hyderabad markets will see moderate growth.
Commenting on the perennial fall of the real estate sector, Anuj Puri, Chairman, ANAROCK Property Consultants says, "A new bottom for the sector was created in 2020 with housing sales plunging to nearly 1.38 lakh units while new launches dropped to 1.28 lakh units. 2020 is not a year that the industry is likely to forget very soon."
Nonetheless, Durga Shanker Mishra, the Housing Secretary of India Inc. has recently poured some expectancy on the real estate builders saying "housing demand in the country has revived". He also added that "Indian's real estate market was estimated to touch $1 trillion by 2030, driven by rising demand and various reforms in the past seven years." Apart from sustained low-interest rates, and overall improvement on the job market, resumed economic activity and sustained stock market growth, various government interventions to combat the pandemic's deleterious effects, increasing desire to own physical assets during times of unprecedented uncertainty will also push the market upward.