Introduction
The COVID-19 pandemic has impacted all businesses, with the real estate sector, especially commercial properties, experiencing a significant downturn. However, the market is steadily recovering and shows substantial improvement compared to recent months. The Indian economy is rapidly regaining momentum fueled by various government policies and relief packages, resulting in a surge of buyers entering the housing market.
These government initiatives commonly involve lower interest rates and tax breaks, concurrently stimulating foreign investment in the Indian economy. Post the lockdown period's downturn and dejection, the real estate sector is not only demonstrating improvement but has also positioned itself as a secure investment choice compared to other sectors. The government has sharpened its focus on residential properties, with surveys indicating that reduced home loan interest rates, now below 7 percent, are providing a substantial advantage to this sector.
RBI Predictions and Statements
The Reserve Bank of India (RBI) projects a growth of 21.9 percent in the first quarter of the next fiscal year and an overall growth of 6.5 percent for the first half of 2021-2022. The RBI attributes this projected growth to the base effect, considering the economic contraction exceeding 20 percent in the first quarter of 2020-2021. The Reserve Bank has also stated its commitment to employing various financial instruments to maintain ample liquidity within the market.
Many real estate developers commend existing government policies.
Harvinder Singh Sikka, MD, Sikka Group-“Since the government has reduced the home-loan interest. We have observed an increase in inquiries and the same will continue in 2021”.
Nagaraju Routhu, CEO, Hero– “Due to the reduced home loan interest and other relief packages by the government and builder the Tier II and Tier III cities have seen an increased demand in the residential segment”.
Therefore, it can be concluded that the real estate market, particularly affordable housing, is poised for growth in the coming months, with further improvement anticipated.