With the declaration of a global health emergency and pandemic by the World Health Organization (WHO) on March 11, 2020, due to COVID-19, the sentiments of businesses worldwide were severely impacted and were mostly negative in their outlooks. The pandemic created a great deal of uncertainty regarding trade and imports across the globe.
The real estate sector also touched the lowest of lows during the nationwide lockdown. While construction activities came to a sudden halt, reverse migration of labourers made the resumption of work difficult. Builders faced severe liquidity constraints and homebuyers lost a significant appetite to buy a property. House sales and new property launches suffered a great deal as the country struggled to fight the pandemic.
Many fiscal initiatives have been developed by the government and the apex bodies to resolve the major challenge of liquidity funding. Liquidity was pumped into the market by the various steps implemented by the RBI and the Union finance minister so that the economy could recover rapidly. In times of crisis, the central government and the various state governments will do well to avoid the further spread of the virus and handhold the Indian real estate market.
Five months into the situation, real estate demand has sparked with genuine homebuyers willing to take advantage of value propositions coupled with payment plans offered by a vast set of developers. Development work across construction sites also begun, although at a slower pace.
Since due to the pandemic there is a major shift to digitization; people who prefer offline property search now prefer online real estate websites to search for their dream homes. Online home sales have started to gain momentum and the key winners of this transition will be leading developers with a good track record. There has also been a huge demand for virtual tours in which home-buyers want to shortlist or finalize their homes the same way. The consumer preference also predominantly shifted towards affordable and mid-segment properties.
There are several initiatives taken up for the real estate revival by the Indian Government which has already boosted demand and revived confidence in the industry. With the steady decrease in the number of COVID-19 infections across the nation and the vaccine around the corner, we expect better days for the economy to turn positive in this quarter financial year along with GDP growth, the lower interest rates for home loans, Repo rate cuts, and newly announced affordable rental housing policy open new avenues for the segment.
The industry players anticipate the upcoming Budget for Financial Year 2020-21 to relax income tax norms and GST reforms. The helpful measures like easing out of the liquidity issues that are being faced by the real estate sector can aid the buyers to make investments, thus lending a positive push to the market.
The real estate in Bengaluru is projected to undergo a prime surge while other segments, such as commercial spaces, luxury apartments, and plots are also expected to show signs of recovery.