As per reports by Statista, the real estate sector employs nearly about 52 million citizens. The industry is estimated to have a market turnover of US $ 1 trillion by 2030 and contributes about 13% to the nation’s GDP. This signifies the importance of the sector in the
country’s growth and prosperity.
The year 2020 witnessed an unprecedented lockdown that came as a huge blow to all kinds of industry. It also saw one of the largest migrant exoduses for months where people were helpless and dealers were unable to manage the crisis.
But, here we are today living with the second wave of coronavirus and it is phenomenal to see how the real estate sector has bounced back and learned from the hard lessons taught last year. Let us have a deeper look at the positive impact of the second wave on the real
Safety assurance to the migrant workers
An industry runs by its employees that uphold its foundation. Earlier almost everything collapsed because people were out on roads homeless, foodless, and above all money less.
But, this time the sector is prepared to face the brunt.
The Confederation of Real Estate Developers Association of India(CREDAI) has announced incentives for workers at the construction sites. The organization has promised them a home to live in situations of a lockdown, food, groceries, and medical help in case anybody gets infected. Special arrangements for the vaccination of associated employees are also assured.
Along with this the construction sites now have the provision of regular rapid antibody testing for their workers and sites are sanitized on a regular schedule. Since people are more aware of the guidelines and operating procedures, it has become easier to hope for early revival.
Semi lockdown in the second wave has also helped in allowing construction workers to be engaged in earning bread and butter. Above all, they have realized that living in a city offers better survival because they get to earn and are supplemented with better medical facilities in case of need.
Increase in housing demands
People have now realized the importance of homes. The mindset has shifted from rentals to ownership for safety and hygiene purposes. Since everyone is now working from home, a large space with well-structured room plans is the present demand.
Maybe office sites will become an obsolete space in the post-covid era.
The icing on the cake has been provided by the Reserve Bank of India that has lowered the housing rates from 8 percent in 2020 to 6.65 percent in 2021. The sudden rate decrement has elevated the property rates and upscaled the home sales business.
The key market of Mumbai and Pune witnessed an increase of 44 percent and 75 percent more demand in Q1 2021 as compared to the previous year. The virtual model of monitoring the construction and access to multiple options has relieved the owner’s stress of transportation and logistics.
Reduced stamp duty
The stamp duty is a tax levied to the buyer during the selling and buying process. It decides home EMI and also income tax returns if the amount is too big.
In August 2020, the Maharashtra and Karnataka government lowered the stamp duty on the property from 5 percent to 2 percent followed by an increment to 3 percent. The registration charges have also been capped at an amount of 30,000 INR for properties with price values higher than 30 lakhs. Rest are charged as 1 percent of the total value. The government aimed to encourage real estate business by these measures and succeeded also. These steps were appreciated by property customers who made the most out of the price cut.
GST waivers, discounted prices, possession-linked payment plans, swap schemes, festive offers, free accessories, and attractive schemes have attracted a substantial number of potential buyers who have invested and are ready to shift in their newly designed residences.
Along with stamp duty reduction and GST waiver, the government has stepped in by providing some innovative schemes such as credit-linked subsidy schemes (CLSS). Though CLSS was introduced in 2015 under the PMAY-urban scheme, it has now been extended to
march,31,2022 for EWS (economically weaker section) and LIG (Lower-income group).
This scheme acts as leverage to promote personal residence purchase by offering interest subsidy up to 2.6 lakhs, depending on the total estimated value, size of the house and annual income of the buyer.
The relief package announced by the finance minister also assured the extension of loan moratorium and a 50 percent cut off in real estate premium that has enormously helped the industry evolve in the second wave of the triple mutant virus.
Such plans foster the middle class of the country to invest in the real estate sector and also supply the little nudge for their dream home by making it affordable.
Increase in investment
The second wave of coronavirus has ignited the love for the home country in the minds of NRIs who want to return. Some need a safe space for their parents and some plan to return after retirement. The reduction in rupee amount against the dollar and digital inspection
and marketing of property has filled the gaps in communication that lures the NRI buyers efficiently.
Lucrative payment plans, easy documentation, increased transparency, reduced interest rates, and feasible customs duties on NRI investments are some of the factors that are encouraging the investment from across the border. Augmented with technology that
provides three-dimensional virtual tours of properties, elaborate online hassle-free discussions pave a positive insight to the buyer.
According to a recent report by 360 realtors, NRI investment in the real estate sector is estimated to be around $ 13 billion in the first quarter of 2021. We owe this to the pandemic that has made us all realize the importance of home soil.
The revamped architecture of existing business models has supplemented the real estate business and the cutting edge technology has multiplied the progression rate. All thanks to the invisible virus for the visible profitable changes.