Amidst lockdown, technology has infused renewed vigor in the Indian real estate sector, particularly driven by online sellers. Before the COVID-19 pandemic struck India, no one ever had imaged even of doing Home Shopping Online, but technology has accelerated the home buying during the lockdown. It is evident that the requirement of a home will never take a back seat. Buying a home will always remain a dream of a middle-class family and this is an appropriate time for buying a dream home.
You must be curious why we are insisting that this is the right time to own a home for a middle-class family? Let us clear the air over this million-dollar question. The residential property prices across the country have dropped between 4 – 12 percent. In a certain locality, property prices crashed significantly more than 12 percent in the last few years due to subdued demand and liquidity crisis in the real estate sector. During COVID-19 pandemic crisis home buyers has the advantage to negotiate good deals on ready-to-move homes. Developers are looking for ways to survive amidst coronavirus crisis and have huge pressure to sell unsold inventory.
Currently, there are around 6.44 lakh housing units are unsold across the top seven cities worth about INR 65,950 crore. Nearly 12 percent of total unsold inventory is ready-to-move housing units spread across the top seven real estate markets. Collectively, Mumbai and Pune Real Estate Markets have over 35,200 units of ready-to-move homes. Subsequently, NCR (15,600 units) realty market, followed by Bengaluru with around 10,100 units of ready-to-move apartments. Amongst the top seven cities, Hyderabad has the least unsold ready-to-move inventory of 2,400 units.
As per a research firm, currently there are around 15.62 lakh housing units are under-construction across top seven cities, of which about 39% are in the affordable budget segment (<INR 40 lakh).
These ready-to-move housing options along with a significant volume of affordable housing unit’s volume availability confer an opportunity for middle-class homebuyers. The current buyers’ market is well supported by low housing loan interest rates. The prevalent home loan interest is in the range of 7.15 – 8.5 percent, which is the lowest rate of interest in the last one & half decades.
Lately, the government has extended Credit Linked Subsidy Scheme (CLSS) by one year up to March 2021 with an economic relief package of over INR 70,000 crores to boost liquidity in the real estate sector. This announcement will stimulate housing demand for affordable projects. The extension of the credit-linked subsidy scheme under Pradhan Mantri Awas Yojana (PMAY) is expected not just to benefit Economically Weaker Sections (EWS) but Middle Income Groups (MIG) also. According to the Government, from CLSS has already benefited 3.3 lakh middle-class home buyers and extension by one year to benefit 2.5 lakh middle income families.
India’s self-reliant vision with a mega economic booster package of INR 20 lakh crore, will help revive the economy and uplift home buyer sentiments. Undoubtedly, post lockdown with these economic measures and policy support from the government Real Estate Sector will witness a boost in demand for affordable and mid-segment housing properties.