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29 December, 2020
The resilient nature currently visible in the Indian real estate sector is expected to remain active in 2021 as well. The sector has been reviving rapidly, with an unprecedented recovery of the sales in the third and fourth quarters of 2020. Previously, the second quarter mostly witnessed stagnancy in the real estate sector with the lockdown imposed due to the pandemic. The borders are expected to be reopened in 2021, which would attract NRI and foreign investors. Although they generally form a large section of the people buying properties in India, their absence was felt in 2020 due to the pandemic.
Needless to say, the real estate sector is now recovering in a healthy manner, contrary to the stagnancy that was seen in the industry in recent years. Being the second-largest employment provider in the country, the sector is receiving considerable support from the government and the banks which makes properties more affordable. Moreover, the fence-sitters who had been waiting for a drop in prices saw this as a golden opportunity and decided to make their purchases as well.
One of the reasons behind the sudden drop in the number of property buyers was the rise in unemployment due to the pandemic. Various businesses had shut down or curtailed their workforce, resulting in financial difficulties of the potential buyers. However, with the restrictions being eased, the businesses are being launched once again and this trend is expected to grow in 2021. This, again, would make it easier for people to buy properties.
The office sector had been gaining importance in major Indian real estate markets such NCR and MMR with the commercial activities booming in these regions. The pandemic was certainly a major blow to commercial real estate as well as the demand for offices fell. However, the prospect of a vaccine being available in the near future is causing many businesses to resume their activities. The sales for office spaces have started on the path to recovery as well and this trend is expected to intensify over the next year as more businesses open up. The rents for offices in Bengaluru are projected to undergo a prime surge while those in Mumbai and the NCR would remain stable. Other segments, such as student housing, senior living and multi-family housing are also expected to show signs of recovery.