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Soon after the Indian economy got hit hard by the pandemic and the lockdown, the real estate sector has started to show healthy signs of recovery. The affordable segment has revived particularly well, displaying a sharp rise in sales. Back in the April-June period in 2020, the real estate sector had been badly affected by the pandemic. Housing sales trickled low, with most of the potential homebuyers postponing their plans for the sake of safety.
A few developers who had adequate digital infrastructure to provide the buyers with virtual tours and other sophisticated facilities managed to thrive. It is also to be noted that a large section of the Indian population suffered a financial crisis due to job losses or pay cuts during the pandemic. As per the HPI assessment, the total number of transactions for property purchases fell by 71% from March to June.
However, this quickly started to change as soon as the lockdown started to be relaxed. From June to September 2020, housing sales witnessed a 150% rise on a quarter-to-quarter basis. Sales have risen particularly well in the affordable housing segment. This was expected, considering the fact that the pandemic has put homebuyers in financial distresses, curtailing their budgets. However, the rapid growth in sales was still unprecedented and it acted as a major boost for the Indian real estate sector, which had been ailing from various issues in the recent years.
It is to be noted that the Pradhan Mantri Awas Yojana (PMAY) has been promoting affordable housing in urban and rural areas. Until 18th January 2021, PMAY has sanctioned 109.2 lakh houses in the urban regions. PMAY aims to provide housing for all by facilitating the development of affordable projects across the country. The access to housing has grown rapidly, especially for the low-income groups.
The government also took various active measures to help the real estate sector during the pandemic. The developers were given an extension of six months to complete their projects. Many of the projects that were stuck in the last phase of construction also received funding from the government. Stamp duty charges were lowered in certain states, thus giving the potential homebuyers an incentive to make their purchase. It is expected that the affordable housing segment would continue to drive the regrowth of the real estate sector this year.
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