Renewed homebuyers interest to sustain sales momentum

The Indian economy has been posting improved growth figures in the past few months, each month bettering the previous one. 2021 promises a similar growth trend. Real estate sales have mirrored this; property registrations done in states like Maharashtra show not just a month on month increase, but also better numbers than the previous year: during September – December 2020. A media report says sales in Mumbai real estate are on a high, better than the previous 8 years: December 2020 deals (9827 units) are nearly 53 per cent higher, YOY. In November, sales were Rs. 14,395 crore, up 67 per cent from a year ago, 64 per cent higher than pre-Covid19. This shows buyer confidence is back, with support from lucrative deals, stamp duty impetus and low home loan interest rates – and this momentum shall continue through 2021. The ‘new normal’ has changed the paradigm, homes with larger sizes than earlier, with flexi interiors and automation as also sustainable are in demand from the new age Millennial home buyer, and this is reflected in the new launches

What will make 2021 a good year for Indian real estate and so, the best year to buy a home in India is resilience from pandemic recovery with the vaccine ‘almost here’; and as economic growth rebounds with obvious positive impact on home seekers confidence and sentiments Incentivization and Impetus from authorities will continue: RBI has said it will continue to employ instruments to ensure ample liquidity. Other announcements during 2020 which will positively impact real estate through 2021 include Rs. 18,000 crore additional funding for PMAY for Urban areas; income tax relief for developers and homebuyers for houses that cost up to Rs. 2 crore; approval of the Union Cabinet to set up a Rs. 25,000 crore alternative investment fund (AIF) to revive around 1,600 stalled housing projects in top cities; 1.12 crore houses sanctioned under PMAY in urban areas; creation of Affordable Housing Fund (AHF) in the National Housing Bank (NHB) with an initial corpus of Rs. 10,000 crore, among others. These will ensure positive growth in real estate through 20201.

Across major markets, India’s residential real estate segment has witnessed a sharp recovery in Q2 FY2021, post a severe decline in Q1 FY2021, according to ICRA, a rating agency. Mumbai Metropolitan Region (MMR), Pune, and National Capital Region (NCR) remained the highest contributors to pan-India sales during Q2 FY2021. A report mentions the launch of 26,785 new residential units in the ongoing quarter, more than twice the launches seen in the previous quarter that ended in September 2020. Given these positives, I feel the housing market is set to chart a new chapter of growth in 2021, in turn making it the best time to buy a home in India. This will be powered by economic recovery, affordability and reinforced desire to own a house amidst improved buyer sentiment. We will also see renewed interest from certain buyer segments such as non-resident Indians (NRIs).