India's residential real estate market seems to have bottomed out in 2020 and sales momentum that picked up during October-December is likely to continue through the next year to reach pre-COVID level or even surpass it provided there are no further unforeseen negative events, according to top property developers and consultants.
The prevailing low-interest rates on home loans, stagnant housing prices, discounts, attractive payment plans, the stamp duty cut by some States, and increased importance of homeownership amid pandemic are some of the factors that will drive sales during the next year, they added.
According to Anarock data, housing sales in the October-December rose to 50,900 units across seven big cities from 29,520 units in the previous quarter. Nevertheless, the sales fell 47 per cent to 1.38 lakh units in 2020 against 2.61 lakh units last year.
"The residential real estate segment seems to have bottomed out now. We have every reason to look to 2021 with real hope and optimism- and with renewed confidence in the strong fundamentals that drive the Indian housing story," Anarock Chairman Anuj Puri said.
Tata Realty & Infrastructure Managing Director (MD) and Chief Executive Officer (CEO) Sanjay Dutt said the sentiments and the economic indicators show early signs of the recovery, but it would be only after another quarter of better results that one would conclude that. The demand for residential is expected to improve from current levels, he said.
Mumbai-based Kalpataru Ltd MD Parag Munot said: "We are witnessing an upturn in buyer sentiment on the back of historic low-interest rates and various enabling initiatives by the state and central governments." However, he said there is a need for more measures such as raising the income tax deduction ceiling on home loan interest to boost demand further.
"The sector will also see consolidation as demand converges on quality realty from reputed developers with a track record of time-bound delivery," Munot said.
Mahindra Lifespaces MD and CEO Arvind Subramanian said: "With homebuyers and investors back in the markets since July this year and a good festive season so far, residential real estate may well be poised for a period of sustained resurgence, with COVID-19 restrictions as a caveat." Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East & Africa, CBRE, said: "Going forward, we expect a gradual improvement in sales across all segments, although mid-income (Rs 45 lakh-Rs 1 crore) and budget (less than Rs 45 lakh) categories are expected to be the key focus areas among homebuyers and are expected to perform relatively better." Bengaluru-based Sobha Vice Chairman and MD J C Sharma said the pandemic, its impact, and the lockdowns adversely affected the real estate industry.
"With some timely and laudable steps taken by the government, the situation is gradually moving towards normalcy in the past two quarters. Though more needs to be done quickly, we have started gaining confidence," Sharma said.
Dhruv Agarwala, Group CEO of Housing.com and Proptiger said: "We expect that the increase in sales seen since October will gain further momentum in the coming months on account of low-interest rates, stagnant housing prices, and attractive offers by developers. Demand in 2021 is likely to recover to 2019 levels and may even surpass it if there are no unforeseen negative events." Knight Frank India CMD Shishir Baijal said: "In 2021, as consumers and businesses move ahead- responsibly managing life and livelihoods amidst this pandemic uncertainty- market trajectory will meaningfully improve compared to 2020. The housing sector, with its latent demand potential and much better demand dynamics, is expected to lead the way." Kanika Gupta Shori, COO and Co-Founder of Square Yards, said the property sector expects healthy demand in 2021, with people most likely to continue considering it as the safest investment option.
Bengaluru-based Shriram Properties CMD Murali Malayappan said the rising demand in the housing sector would only further emphasise that the year 2021 belongs to the real estate sector.
Aparna Constructions and Estates Director Rakesh Reddy said: "The 60-day lockdown halted businesses, however, the real estate industry managed to get back on track slowly once the lockdown was lifted. 2021 is expected to improve the momentum further and is most likely to be a promising year for the real estate industry".
Omaxe Ltd CEO Mohit Goel said: "We are hopeful that the festive season momentum will continue going forward with RBI's indication of maintaining accommodative stance and government's assurance of not winding down stimulus.
Pradeep Aggarwal, Co-Founder & Chairman, Signature Global, said the market for affordable housing is robust, and in the coming months, there will be more movement. "People have realised the importance of owning a home, and this feeling is going to persist." Amit Raj Jain, Head of Sales, BPTP Ltd, said it is expected that 2021 will turn out to be a brilliant year for both segments i.e., ready to move in inventory and new launches because of pent up demand.
Sushma group Executive Director Prateek Mittal said the housing demand would rise in integrated townships because of safety concerns, while Pankaj Kumar Jain, Director of KW Group, said: "2021 in many ways will be optimistic with the help of policy makers. We have learned that consumers are taking investment in a residential property seriously so we think it will get a boost eventually."