The country is going through the second wave of coronavirus infection, and the business world is concerned about its impact; the real estate sector is observing the situation with bated breath; however, the realtors feel that everyone must work together to contain the second wave. As the government has hinted that complete lockdown is not on the lines, the sector believes that a short lockdown will not affect much as construction stock remains on the sites, and sales are happening online also.
The sector is ready with the learnings from the last year to handle the situation. Manoj Gaur, CMD, Gaurs Group and Vice President - North, CREDAI National says, "The country's residential real estate sector is gaining traction, thanks to various steps taken by the central and state governments, the RBI, and the banks. The rise in supply numbers in the first quarter reflects this positive shift, indicating that developers are more confident in terms of liquidity support and consumer sentiment. After the second wave, the current situation is likely to drive up real estate demand even further. The stability and utility of real estate assets are clear to people, particularly after the experience in 2020 with various other investment tools, and NCR will clock in good sales numbers in the coming months."
Many developers are also offering deals to retain the interest of the buyers. The market is full of offers such as 60:40, 40:30:30, assured returns, no EMI till possession, etc. Sharing his views on the efficacy of such deals in current situation, Nayan Raheja of Raheja Developers, says, "Offers and deals are made in response to the increased demand to make consumers revel in their decision to invest in a real estate asset. The worst is over, even though there is still a long way to go. The challenges that real estate faced in 2020 will act as a catalyst for the sector's long-term expansion"
Sagar Saxena, Project Head, Spectrum Metro, feels, "Following the partial opening of the economy, demand increased due to government stimulus and RBI liquidity initiatives. When numerous developers made lucrative deals, the situation improved even further. Nonetheless, the positives that have emerged from the 2020 crisis will serve as the foundation for the real estate sector's development in the coming months. The demand for larger homes within an accessible, hygienic, and green complex with amenities such as healthcare, daily necessities, and everyday rejuvenation within walking distance would drive demand."
Some people are speculating that the second wave will bring down the prices; however, the sector is unanimous that there is no probability of a decrease in prices. The cost of construction has increased by 5-6 per cent, owing to procurement difficulties, supply chain disruptions, rising raw material costs, and increased costs for health and safety as a result of the global crisis. "Prices in real estate are at their lowest level and are likely to go up in future. In 2020, we witnessed a marginal increase in prices in few markets, including Delhi NCR. However, real estate is becoming affordable due to low home loan interest rate, reduction in stamp duty in some states, etc. The time is right to invest in real estate as prices are likely to go up in the short term," says Kushagr Ansal, Director, Ansal Housing and President, CREDAI - Haryana.
For the last few years, one of the factors majorly affecting the prices is the raw material cost. "The cost of some of the raw materials has gone up by 200 per cent in the last three years, making it unrealistic to cut down prices in real estate projects. Looking at the emergence of buyer-friendly, especially post-2020, people should not wait to get hold of real estate asset. By the end of 2021, the chances of witnessing price rise in the range of 5-8 per cent in various markets," says Harvinder Singh Sikka, MD, Sikka Group.
Almost everyone in the sector echoes the sentiment that there are chances of an increase in prices. Dhiraj Bora, Head Marketing & Communication, Paramount Group, says, "Even the new projects are being launched at higher prices as the developer community has no choice but to increase prices due to the increasing cost burden. People are investing now in real estate, and we are seeing that even the fence-sitters are going ahead with buying decision. The coming months will witness a price rise; the percentage of change will vary according to the markets."