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The Indian real estate sector, which had been undergoing a period of slowdown and stagnancy in recent years, is witnessing a sudden revival in the wake of the COVD-19 pandemic. Like almost every other industry, real estate faced a crisis as a result of the pandemic. However, several factors have helped this sector flourish in a healthy manner in recent months.
One of the most severe problems that the realty sector has recently been facing was a drop in sales. The millennials have developed a concept that renting a home is better than buying a new one. So far, this did prove convenient for the professionals who need to move often as a result of shifting jobs. However, the pandemic brought forward the importance of owning a residential property. A rental home doesn’t offer the safety, privacy, personal space and customization that one can enjoy while residing in his/her own home. This led to a sudden spike in housing sales in several cities.
The work from home trend has left positive effects on the realty sector as well. Many of the professionals working from home faced an unexpected problem, the lack of space. The absence of a dedicated space at home which can be used as an office severely hampered the productivity and caused them to upgrade to a larger home. The demand for properties in housing complexes with office spaces has risen as well. The work from home trend is expected to stay and so is the demand for properties with provision for a workspace setting.
The inventory of unsold properties in India had been steadily rising in recent years. This is primarily because of an excess of luxury properties in the market. In order to maintain the cash flows in the face of the crisis posed by the pandemic, many of the developers started coming up with affordable projects to boost sales. This served as a benefit for builders as well as homebuyers. While the buyers now get to choose from more options within their budget, the developers have been able to earn profitable returns that helped them resume the stalled projects.
Further reinforcing the momentum, various initiatives by the government and the RBI have played a key role in the revival of real estate. The government reduced stamp duty charges in many cities, including a complete suspension of stamp duty in Mumbai. The RBI has lowered the repo rates and this reflected in the lower home loan interests, making it easier to buy a property. This acted as a stimulus for the fence-sitters, who had so far been waiting for lower property prices to buy a home. It is expected the industry would continue to witness this healthy growth in the coming months.
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