In our country, the real estate sector has been the second-biggest source of employment, the first being the agriculture sector. It is estimated that the real estate sector in India is expected to cross US$ 1 trillion in market size by 2030, with a contribution of 13% to the country’s GDP by 2025.
According to current government estimates, by the year 2051, around 88 crore people are going to be living in urban areas of India, a whopping 91% increase from the present 46 crores. This will lead to a substantial increase in demand for residential real estate.
While the long-term story seems to remain intact, the onslaught of the Coronavirus pandemic and resulting series of local, regional, and national lockdowns between March and June 2020 severely impacted the nation’s economy. When the country was trying to limp back to some revival mode came the second wave, seemingly far more severe. The real estate sector, especially in big cities like Hyderabad, was severely affected, with new construction coming to an abrupt standstill due to the mass migration of labour to survive. The industry experts believe that the recovery will depend on how India deals with the Coronavirus and carries out the mass vaccination program.
The scale of impact as it stands
Going by a report from India Ratings (Ind-Ra), while the overall residential demand declined by over 40 percent in H1 of FY21, the new project launches across India increased by 71 percent between January and June 2021.
Whatever the current scenario is, developers believe that the sector is better prepared. The pandemic has made one thing clear: it is time to plan for the short term rather than the future due to uncertainty within the market.
Here are four reasons which come as a relief for real estate developers and are beneficial for home buyers:
1. Gradually firming up of prices
Demand and supply have shown signs of recovery, albeit slow, with new property prices going up in cities like Hyderabad by as much as 5% compared to the same time last year.
2. Actual buyers: For residence, not investment
With work from home becoming the order of the day, families started spending more time together. The pent-up demand for residential real estate from home buyers for actual residential purposes and not just for investment or realty value appreciation came to the fore, providing relief to the real estate sector.
3. Attractive home loan interest rates
Homebuyers are regaining confidence within the realty sector despite the Covid-19 pandemic-related slowdown. Amid the RBI continuing to remain the repo rate unchanged at 4%, homebuyers can get home loans for as low as 6.65% annual interest compared to eight seen in January 2020.
4. Buy properties from wherever you are
Like all other industries, the real estate sector saw a big wave of digital adoption both by the developer and the buyer, going beyond the usual websites and videos to try & recreate the immersive experience of exploring a residential property! This has helped in faster, smarter scouting, shortlisting, and finally buying properties from the comfort & safety of wherever the buyer is.
The ongoing pandemic has and will continue to impact different parts of the real estate ecosystem differently. The human and sectoral resilience aided by favourable governmental policies and positive consumer sentiment is expected to help put the past behind and move forward with much optimism.
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