[ecis2016.org] We examine the reasons why residential real estate continues to show signs of optimism, in spite of the downturn caused by the pandemic
The real estate sector is the second-biggest employment generator in India. Going by that data, one can understand the large scale of activities that have been taking place in the sector, across the country over the years. It is arguably one of the most preferred modes of investment today.
You are reading: Residential real estate: The most worthwhile asset for investment
Although the Coronavirus pandemic did put the brakes on the wheels of the economy, resulting in a lull in the real estate sector too, the residential real estate segment continued to show signs of optimism. Various elements, such as tax rebates, reduction in repo and interest rates and stamp duty cuts, are driving the demand among customers.
Real estate demand and potential
As per the report by IBEF (India Brand Equity Foundation), the volume of home sales across the eight major cities in India jumped by two-folds after the first lockdown. With this increase in numbers and positive buyer sentiment, the future looks promising.
The real estate sector continues to prove, time and again, that the investment made on this asset will yield high RoI. Continued government support, combined with developers’ timely measures and implementation, have resulted in greater growth. According to estimates, the market is expected to grow to USD 9.30 billion by 2040 from USD 1.72 billion in 2020. With the RBI maintaining the repo rate at 4% and the reverse repo rate at 3.35%, to mitigate the impact of the COVID-19 pandemic, it has given home buyers the opportunity to exercise their interest in residential assets.
Read also : Sustainability: A necessity in modern infrastructure development
Additionally, policies such as the extension of tax benefits till March 31, 2022, for already completed projects, is making it safer and lucrative for both, the developers and customers alike. Moreover, the extension of the tax deduction of Rs 1.5 lakhs, on the interest paid on affordable housing loans by one year, will encourage more potential buyers to invest in the sector.
[ecis2016.org] New gr for housing society AGM 2021
Factors driving demand for residential realty
Bangalore, which is among the eight major cities in the country, has seen marginal increase in sales in the housing sector. The large markets, such as Bangalore, Mumbai and Pune, witnessed Y-o-Y revisions of 1%, 3% and 5%, respectively. It also received a booster shot with many residential players announcing attractive prices, thereby, influencing the purchase decisions of home seekers. According to an IMGC report, property prices across most markets have corrected between 5% and 20% in the last few months. Although the pandemic affected everyone’s cash flow, the government’s support and timely measures by developers are driving sales. The significant correction in price is a major advantage for buyers to invest in homes, whether first or second homes.
India’s economy has taken a big hit during the pandemic and this has affected consumer behaviour patterns, as well. With the new normal of working from home and online schooling, there is a need and demand for comfortable and spacious homes, even if it entails moving to peripheral areas. A recent survey by CII-Anarock showed that nearly 62% of the people in the age group of 28-45 years are considering buying homes now. Tier-2 and tier-3 cities are emerging as preferred places for investment. With phased unlocking being implemented along with vaccination drives across India, the economic recovery is gaining momentum.
Read also : Special coach for women introduced in Hyderabad Metro
[ecis2016.org] Will 2021 be the year of real estate in tier-2 cities?
Macro-economic measures that will boost demand for homes
The prime minister’s call for self-reliance, as part of the Atmanirbhar Bharat campaign, will also benefit the sector as projects will receive government policy support. The government also announced a host of reforms to attract investment, improve ease of conducting business and strengthen the Make in India initiative. Another significant step taken by the government, is the focus on affordable housing in Budget 2021-22. An allocation of Rs 54,581 crores for the Housing Ministry has brought great relief to the sector. With the sector getting a boost from these reforms, improved market sentiment is driving the residential real estate segment in the path of assurance and development.
[ecis2016.org] Know more about Resident Welfare Association bylaws pdf
The home buyers’ market has been changing, too. A lot is dependent on how and what the developers are offering, by understanding the requirements of the customers. According to the IMGC report, the home affordability index has shown the best results in the top cities. The graph is only expected to improve in the coming months. Experts believe that the current offerings and time are right to invest in homes. From the I-T Act perspective, the three sections, namely, Section 80C, Section 24 and Section 80EEA, allow one to avail of maximum tax benefits annually. With home loan interest rates now as low as 6%-7%, investment in the housing segment is most prudent.
(The writer is senior vice-president, SOBHA Limited)
Source: https://ecis2016.org/.
Copyright belongs to: ecis2016.org
- Student housing: An unorganised segment with potential for lucrative returns
- Maharashtra to have development plans for every district: CM
- Here’s why more projects need to provide open spaces for children…
- Coronavirus: Government allows construction in safe zones, in partial relief to realty
- ‘Residential cluster development is the way forward, in an increasingly urbanised India’
Source: https://ecis2016.org
Category: Lifestyle