The Growth In Real-Estate In 2021

Indian realty sector has witnessed tumultuous events in recent years. However, the sector showed huge resilience by adjusting to the policy changes such as demonetization, GST introduction, RERA/HIRA compliance and came out stronger.
We foresee an improved working of the realty sector in the future which will tremendously help the homebuyers. In fact, we expect the housing market to remain a buyers’ market in the foreseeable future. Better transparency, innovative products, enhanced compliances, and timely delivery is what we expect to consolidate further in the real estate industry.

What are the changes homebuyers can expect from the property market in 2021? Let’s dig deeper

Following are trends for real estate investors in 2020:

Greater Concentration of Demand

Jobs have a direct correlation in the growth of the Indian economy and changing demographics. Today’s home seekers, be it for buying or renting, don’t mind relocating to new cities if the prospects regarding employment opportunities are engaging. Most jobs tend to be service or office jobs and businesses that provide these jobs need more support services that are most efficiently delivered in big markets. IT & personnel support, office space and healthcare are more effective when they’re concentrated. And nowadays entire cities are also being built using eco-efficient technologies to reduce negative impact on the environment like Jaypee Sports City and many others. So, businesses, cluster in markets where these services already exist, which in turn concentrates the services even more, making the markets even more attractive. What this means for investors is that demand for housing in big markets almost certainly will continue to grow faster than builders can create more supply which will eventually escalate prices and rents.

Home Loan Interest Rate Is The Lowest Now

The home loan interest rate is the lowest in the last 15 years and although we expect that the interest rate will remain benign for some more time, it may slowly inch up as the economic cycle turns up finally. Inflation is the major risk factor and it is benign in the winter but generally starts going up after the winter. If inflation goes up considerably, the interest rate is likely to go up. We do not foresee any further dip in the interest rate from here on as inflation is not likely to reduce any more from here. Homebuyers are taking advantage of the lowest EMI per lakh in a long time. However, this scenario is not likely to last forever. Buyers planning to benefit from a low-interest rate regime must hurry up to complete the transaction without waiting any further.

With work-from-home a viable option today, many future homebuyers may shift to the peripheral areas for bigger homes and a better lifestyle – at more affordable prices. Thus, the previous ‘gold standard’ of Indian housing – the walk-to-work / short drive to work, by definition only in and around central corporate workplace hubs – may thus shed much of its popularity for several prospective homebuyers.

New Launches Between January And March 2021

The quarter witnessed the launch of about 600 new residential projects in the top eight metro cities. Despite an increase in covid cases, Mumbai led all cities for the third quarter in a row with a 38% share in new and relaunched projects. Hyderabad surpassed Pune and took the second position with a 21% share. Interestingly, Delhi NCR again contributed the least with a 3% share in the overall new unit additions.

Bigger Gap Between Owning And Renting

The surge in home prices in recent years, especially in many of the big markets, puts a house beyond the reach of more people. This is good news for investors in rental property but also means that it’s difficult to just buy a home and rent it out: the number of people who can afford the high rent is small. A better strategy in these markets is to split a home into several rental units, even though that takes time and money. Apartments are also a good idea, especially because rents will continue to rise, even if home prices don’t.

Property Prices Will Not Reduce In 2021

Although we do not foresee any runaway inflation in property prices, higher raw material prices and enhanced cost of funds will ensure that it will reduce.
There has been a benign property price (and home loan rate) regime for quite some time now, and this has immensely helped the homebuyers. Homebuyers waiting for any further reduction in property prices will most likely be hugely disappointed.

How’s The Picture Looking For Kolkata?

In rapidly growing urban cities like Mumbai, Bengaluru, and Hyderabad, the property markets yield faster growth, in contrast to sale of properties in Kolkata. The real estate graph has been steady, especially in the domain of residential flats in Kolkata. The impact-resistant characteristic of Real Estate Kolkata has been a crucial contributor to why major players from the realty sector are investing in properties at Kolkata, particularly in the current slow-down trend of the market.

The recent surge in investment in real estate is attributed to great tolerance to market blows. This has increased the attractive index of the city’s real estate market graph, producing a healthy market for sale of flats in Kolkata. Furthermore, several launches of new residential projects for flats in Kolkata north, and upcoming residential projects for flats in Kolkata south. Besides Kolkata has overtaken major up-market cities in the affordable real-estate market with projects launched for low budget flats in Kolkata, and cheap flats in Kolkata, therefore with realty costs decreasing, investment in real estate Kolkata is increasing.

Going forward, Kolkata is establishing itself as the go-to destination for education, healthcare, IT, tourism, biotechnology and financial services and the deep bucket of USD 15 billion set aside to be phased out in next five years for construction of roads, flyovers, ports, bridges, power stations, renewable energy centers etc. will ensure that it rubs shoulders with Asia’s finest business centers.

Considering the various beneficial real estate trends listed above, experts are optimistic about the future of the real estate industry in the country and look forward to brighter days.

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