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By Animesh Deb and Venkatachari Jagannathan
After facing a body blow due to pandemic, the real estate sector seems to have come out of the woods lately and the growth momentum in the realty space is expected to continue in 2022. Among various segments, residential space saw a huge uptick in 2021.
"The year 2021 was a watershed moment for India's real estate sector. Even when the going was tough, the sector not only remained resilient but also emerged stronger than expected," said Ramesh Nair, CEO, India and Managing Director, Market Development, Asia at Colliers, a global real estate consultancy.
The consultancy expects 2022 to be even better for the realty sector, even if it is marred by the new Covid-19 variant - Omicron. "We have now learned to live with uncertainty. Gross absorption in 2022 should be about 15-20 per cent higher than this year as occupier confidence is back in the market," Nair said. The residential segment has witnessed green shoots of recovery and is expected to gain further momentum in 2022.
"The residential segment is expected to reach pre-Covid quarterly sales volumes in 2022 and given the strong momentum may also match the pre-demonetization quarterly sales in the latter half of 2022," said Samantak Das, Chief Economist and Head of Research and REIS (India) at real estate consultancy firm JLL.
people are going in for bigger apartments Jason Briscoe / Unsplash
Besides, industrial and warehousing are expected to strengthen in 2022 aided by strong business fundamentals. Further, investment in life sciences and data centres businesses are also gaining traction. "New projects are coming up. One of the trends is that people are going in for bigger apartments than what they earlier had following the work-from-home norm since the Covid-19 pandemic struck India in 2020," said T.Chitty Babu, Chairman and CEO, Akshaya.
"Earlier people had spent most part of their day in the office or college or school. And when home turned into office, college and school they found their existing dwelling small and are now upgrading." On the manpower utilization post Covid-19-led lockdowns, Babu said with migrant workers going back to their native places, the real estate players have learnt to carry on with their project with lesser hands. Furthermore, in 2022, Mumbai, Bengaluru and Hyderabad are expected to lead India's residential real estate recovery, said online real estate seller Housing.com.
Notably, home purchases have picked on the back of record low home loan interest rates and higher affordability driven by stable real estate prices. "… the tier-II cities like Surat, Jaipur and Patna are the ones that have recorded the highest increase in online property search volume in 2021," Housing.com said in a statement.
record low home loan interest rates Tierra Mallorca / Unsplash
In recent times, retail demand has skyrocketed and changed the pattern from investor to end-user driven market. "Some pockets that witnessed infrastructural announcements in 2021, like the area around Noida International Airport, will be on the radar of investors and buyers. The trend of bigger and smart homes, luxury features, and increased demand for plots that started in 2021 will carry forward to 2022," said Manoj Gaur, CMD, Gaurs Group and Vice President - North, CREDAI National.
Segment-wise, the office space sector is expected to perform better in 2022. It is likely to clock a 30-35 per cent growth YoY. Especially, the data centre business is moving northwards. With increasing talks of data protection and safety measures, investments in data centres are going to give a structural push to the real estate industry.
"…rollout of 5G, ever-rising digital usage, increasing footprint of global data centre operators and cloud players would usher in another high growth year for the Indian data centre industry in 2022," JLL said. After two long years of working from home, the trend of working from offices too is expected to pick up in 2022. "…as office resumption picks up, it is expected to translate into healthy traction in new leasing activity, as the underlying demand potential from occupiers, who are mainly IT or ITES and global MNC companies, is estimated to remain strong," rating agency ICRA said.
the office space sector is expected to perform better in 2022Austin Distel / Unsplash
According to Nitin Gupta - President- Sales, Marketing, CRM (Head) at Mantra Properties and Developers: "Lately IT sector in India has been into aggressive hiring, which will play an important role in income." "This has led to increased demand in commercial space, this has led towards increased requirement for boutique offices creating a flexible environment. Hence this will lead to increased demand for commercial spaces."
For residential space, Gupta expects a rise of eight-to-ten per cent in capital value in the year 2022. Furthermore, commercial spaces such as retail malls have witnessed a faster recovery in cash flows after the second wave, compared to the recovery after the first wave of the Covid-19 pandemic, driven by faster relaxation in the restrictions and improved vaccination coverage.
Cyrus Mody, Managing Partner at Viceroy Properties said home sales and new launches are showing improvement which in turn indicates a turnaround in the real estate sector after undergoing dramatic structural changes followed by severe lockdowns during the two Covid-19 outbreaks. "The stamp duty benefit announced by the government of Maharashtra encouraged fence sitters to invest in residential real estate resulting in historic sales numbers," he added.
Maharashtra government reportedly reduced the stamp duty on property registrations Unsplash
In a bid to provide a boost to the realty sector, the Maharashtra government reportedly reduced the stamp duty on property registrations during September to December in 2020 and January to March in 2021. The other thing in which people have now become more aware is about green and sustainable buildings.
"The Covid-19 has created awareness about green buildings. India is the second largest market for us with about 3,800 projects participating and about 2,500 projects getting 'LEED' certified," said P.Gopalakrishnan, Managing Director, Asia Pacific & Middle East Markets, US Green Building Council. According to Gopalakrishnan, the participating projects include new buildings under construction as well as existing buildings that are carrying necessary additions, modifications to get certified. Gopalakrishnan said, educational institutions, hotels, office buildings and others are also now looking at green certification. (IANS/SP)
(Keywords : pandemic, real estate, growth, momentum, residential, uncertainty, recovery, industrial, warehousing, business, investment, traction, apartment, manpower, Mumbai, Bengaluru, Hyderabad, purchase, Surat, Jaipur, Patna, commercial, turnaround, lockdown, boost.)
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By Ahmed Ali Fayyaz
Involving an investment of Rs 18,300 crore, in housing, commercial infrastructure and film sectors in Jammu and Kashmir, as many as 39 Memorandums of Understanding (MoUs) were signed on Monday in the Union Territory's winter capital of Jammu.
The country's top giants in real estate, including promoters in residential, retail and commercial space, entertainment industry, tourism and hospitality, logistics and warehousing and financing institutions had gathered to kick-start the UT's growth and development under a new government policy with their participation in the first ever eReal Estate Summit-2021'.
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Union Minister for Housing & Urban Development, Hardeep Singh Puri, Minister of State in Prime Minister's Office, Dr Jitendra Singh, J&K's Lieutenant Governor, Manoj Sinha, and senior bureaucrats from the Union and the UT Government were present at the MoU signing ceremony. Puri said that real estate being the country's second largest employer, would create innumerable opportunities for J&K's economic growth. The natural endowments in the UT and resilience of its people were second to none in the world which now needed to be translated into economic development, prosperity and ease of living, Puri added.
LG Sinha described the event as a historic milestone in J&K's real estate sector. "Last few years have seen tremendous change in terms of good governance, delivering development and transforming the infrastructure of the UT. Barriers to businesses in J&K have been removed. The UT of Jammu & Kashmir is now an attractive place to do business and invest", he said. He announced that the next 'Real Estate Summit' would be organized in Srinagar on 21 and 22 May, 2022.
Also Read : Hiking destinations in Kashmir
"Development of local businesses is imperative in scripting the growth story of J&K. Besides national players in real estate, local developers of J&K will also be at the focus of this new dawn of development of the real estate sector in the UT", Sinha said. "The multiplier effect of the first-ever Real Estate Summit in J&K will be felt across the entire UT in coming years".
Highlighting the key features of the Model Tenancy Act, Sinha said that the law had been prepared with the objective of balancing the interests and rights of both, the landlord and tenant, and to create an accountable and transparent ecosystem for renting the premises in an efficient manner.
Such initiatives will help developers as well as homebuyersUnsplash
"Owning a house is the dream for everyone and we are making a committed effort to bring it into reality. The launch of many portals including RERA portal, Housing Portal, Integrated Auction Portal will facilitate a transparent and accountable framework in the real estate sector. Such initiatives will help developers as well as homebuyers", Sinha elaborated. "We have also launched three housing schemes today under which about 1000 EWS apartments (under PMAY) and another 150 MIG and HIG apartments are being launched. Many more would be launched in the coming months", Sinha disclosed.
The LG said that the regressive land laws were amended providing relief to many sectors from farming to industries, education, real estate, hospitals and IT. Several progressive policies and procedural reforms had been implemented on the ground. The best Single-Window Clearance System and every possible support of the government would be ensured to facilitate the investors, he added. Recently, we have made changes in the Land Use Policy so that the companies eager to set up industries do not face the problem of land, Sinha said.
The LG said that the regressive land laws were amended providing relief to many sectors. Unsplash
"Despite being endowed with immense natural wealth, business opportunities and excellent human capital, the progress of the industries in J&K were stalled. Since 5 August 2019, J&K is undergoing a massive transformation, and industries from all over the country are seeing Jammu and Kashmir as their preferred destination for investments and business ventures" Sinha added.
"Efforts of the Hon'ble Prime Minister and Hon'ble Home Minister are yielding favorable results with the new Industrial Development Scheme attracting huge investments in J&K. Within a year, we have received proposals for investment worth Rs 44,000 crore. By March 2022, we will be able to bring an investment of Rs 60,000 crore to Jammu and Kashmir", Sinha asserted.
The LG said that Rs 1 lakh crore was being spent on highways, tunnels, and related infrastructure due to which the nature of urban infrastructure will be completely transformed within two or three years.
The LG said that Rs 1 lakh crore was being spent on highways, tunnels, and related infrastructure. Unsplash
Speaking on the occasion, Durga Shanker Mishra, Secretary, Union Ministry of Housing & Urban Affairs said that a paradigm shift in terms of development had been witnessed in every sector in J&K. The real estate sector, he said, would create plenty of opportunities for the people of the UT in terms of employment and investment. Niranjan Hiranandani, Vice Chairman National Real Estate Development Council (NAREDCO) and Rajan Bandelkar, President NAREDCO also spoke on the avenues and opportunities of infrastructure development, particularly in the housing sector in Jammu and Kashmir.
J&K's Principal Secretary Housing & Urban Development Dheeraj Kumar signed an MOU on skilling under which NAREDCO would hire 10,000 skilled workers in the construction industry-electrical, plumbing, masonry, carpentry and the like. A coffee table book capturing the true essence of the new J&K was also released. (IANS/SP)
(Keywords : Kashmir, film, commercial, real estate, cash, housing, development, workers, construction, highways, tunnels, residential, retail, entertainment, tourism, hospitality, logistics, financing, warehousing, growth, business, investment, infrastucture.)
By Pankaj Bansal
According to a report released in August by the Indian Real Estate Industry, the real estate market is all set to reach a market size of $1 trillion by 2030, and will contribute 13 per cent to the GDP by 2025. The report also predicts the market growth to go up to $9.30 billion (about Rs 65,000 crore) by 2040. As per the Department of Promotion of Industry and Internal Trade Policy (DPIIT), the real estate sector is also the third largest sector in terms of FDI flow, it is second largest employment generator, and third largest sector to induce economic growth.
The sector that deals with housing, retain, hospitality and commercial is expanding with multi-fold increase in demand and growth in mandate from urban and semi-urban accommodations. Real estate is ranked third among the 14 major sectors in terms of direct and indirect or induced impact on all the sectors of the economy. The real estate sector is also the second largest sector in terms of employment generation, only after agriculture. It works in short term employment generation as well as long term.
The question is, what is driving the real estate sector in India so aggressively?
Is it the change in the need and mindset of the society for long term investment or it is that the government has decided to relax norms and policies to attract investment in real estate? The answer should be both. In July this year, the Securities and Exchange Board of India (SEBI) had lowered the minimum application value of Real Estate Investment Trusts from Rs 50,000 to Rs 10,000–15,000 to make the market accessible to small and retail investors. Even the co-living market in the top 30 cities, primarily metros, is set to grow almost double -- to about $14 billion from the current size of $6.70 billion.
Board of India (SEBI) had lowered the minimum application value of Real Estate Investment Trusts from Rs 50,000 to Rs 10,000–15,000 to make the market accessible to small and retail investors. | Photo by CHUTTERSNAP on Unsplash
According to another report by Savills India, the real estate demand for data centres is also increasing -- by 15-18 million square feet by 2025. The Central government has also given impetus to the sector by deciding to build 20 million affordable houses in urban areas across the country by the end of FY 2023. This is being done under Prime Minister Narendra Modi's Pradhan Mantri Awas Yojana (PMAY) scheme under the Ministry of Housing and Urban Affairs.
Going by various reports, Indian real estate sector attracted $5 billion institutional investments in 2020 itself, which is equivalent to 93 per cent of the transactions recorded in the previous year, and even the private equity recorded investments worth $3,240 million across around 20 deals in Q4 of FY 2021. As per the report from the DPIIT, construction sector is the third largest in terms of FDI inflow. The sector attracted $51.5 billion FDI between April 2020 and June 2021. Moreover, in Q3 of FY 2021, the housing sector stood at 62,800 units, which is an increase by 113 per cent YoY across all the top seven cities, as compared to 29,520 units in Q3 of 2020.
In Q3 of FY 2021, the housing sector stood at 62,800 units, which is an increase by 113 per cent YoY across all the top seven cities, as compared to 29,520 units in Q3 of 2020. | Photo by Carlos Muza on Unsplash
Of the seven cities, Mumbai accounted for 33 per cent of total sales, followed by the National Capital Region at 16 per cent. According to a JLL Report, between January and March this year, Noida accounted for 55 per cent of net absorption, followed by Gurugram at 38 per cent. Delhi-NCR has also been witnessing sharp increase in demand for office space.
Due to low mortgage rates and incentives extended by the developers, demand for residential real estate revived in Q4 of 2021. Blackstone, which is one of the largest private market investors in India managing about $50 billion of market value in the real estate sector, is looking to invest another $22 billion in the next 10 years. With all the above, the government initiatives will be the game changer. The 100 smart cities project is a commendable opportunity for the real estate sector. The tax deduction of up to Rs 1.50 lakh on interest on housing loan, and tax holiday for affordable housing projects have been extended until fiscal 2021-22.
Due to low mortgage rates and incentives extended by the developers, demand for residential real estate revived in Q4 of 2021. | Photo by Tierra Mallorca on Unsplash
Income tax relief measures for real estate developers and home-buyers for primary purchase/sale of residential units of value up to Rs 2 crore from November 12, 2020 to June 30, 2021 have been quite successful. The government has also set up the Alternate Investment Fund (AIF) that is set to revive around 1,600 stalled housing projects across the top cities in the country. The Union cabinet has approved the setting up of Rs 25,000 crore for the said purpose. The creation of AIF in the National Housing Bank and approval of 425 SEZs are going to further pump up the real estate market.
Finally, SEBI has also given its approval for the Real Estate Investment Trust (REIT) platform, which will allow all kind of investors to invest in the Indian real estate market. This is expected to create an opportunity worth $19.65 billion in the Indian market in the coming years. Knowing that there is a shortage of 10 million units in the urban areas and further knowing that 25 million units of affordable housing will be required by 2030, who can stop real estate sector to hold a minimum 13 per cent contribution in the GDP of the Indian economy? (IANS/ MBI)
Keywords: real estate, opportunity, government, india, investment, urban, housing, market, sector
Owning a house is one of the life goals of many people. If you are willing to buy your dream house, it's time to make the move as the housing prices have seen optimal correction and are unlikely to fall further. "In fact, all-time low-interest rates, government impetus to housing for all, ample ready supply and attractive offers by the developers have made it an opportune time to buy a dream home," suggests Ankit Goel, Director, Goel Ganga Developments. He shares a few factors cementing the fact that now is the best time to buy a property.
Reduced home loan interest rates
Owing to the pandemic, the Reserve Bank of India (RBI) employed a liberal approach and reduced the benchmark Repo rates on multiple occasions during the last two years. This resulted in a sub-seven percent regime of home loan interest rates. A year ago, the home loan rates were falling in the range of 8-9 percent. Now, the rates have reduced to seven percent or even below it. It results in a significant cost saving in the Equated Monthly Installments (EMIs).
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If experts are to be believed, the home loan seekers must pay heed to their credit score as the best loan rates are offered to clients with a credit score between 750 and 800. Once the loan is availed at low rates, the buyer will enjoy low EMIs throughout the tenure of the home loan.
Corrected prices and offers
At the time of the sudden breakout of the pandemic, the homebuyers deferred their decisions in the hope of a further decline in prices and hoped to get the best quotes once the pandemic phase is over. However, the nation is now prepared to move ahead with the Coronavirus. The home prices have corrected to the lowest level they can get, and further scope of corrections is limited. Moreover, the real estate developers are offering attractive rebates such as EMI holidays, absorption of stamp duties, and furnishing at no extra cost. In addition to this, developers are also transferring the benefits of stamp duty rate reduction in various states to the potential homebuyers, resulting in further cost savings.
This time, the real estate market is far better off than in the times of the 2008 economic downturn. At that time, it was a sellers' market. Although Coronavirus had temporarily halted the real estate and construction projects for a brief period, the arrival of vaccines has revitalized the sector. The new project launches have provided potential homebuyers with ample ready to move in options to choose from. In fact, a sufficient supply has enabled the buyers to negotiate and buy their dream home at bargained prices. Overall, it is a buyers' market, and one should not wait further to go ahead.
During the current situation, the government has been prompt and active in providing relief packages. Be it announcing the National Infrastructure Pipeline or extending the benefits of Pradhan Mantri Awas Yojana (PMAY) for EWS strata of the society. The Government has also lent a helping hand by suspending the Insolvency and Bankruptcy Code (IBC) so that corporate borrowers do not face insolvency proceedings due to factors beyond their control. The 'Housing for All' by 2022 Mission is providing a conducive environment to own a dream home. The extension of CLSS benefits has presented a unique opportunity to the buyers to go for the home purchase.
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Come what may, the real estate sector remains one of the most trustworthy investment options available. With declining Fixed Deposit (FD) returns, and the ever-fluctuating stock market, and dwindling Gold prices, the idea to own a home attracts a majority of people. Moreover, the corrected state of prices has made home-buying an even more desirable and feasible option to opt for. In terms of stability, the real estate and property market beat almost everything. If one is thinking of a long-term investment perspective, a home purchase must be on the priority list. All in all, the real estate sector is filled with confidence and positivity and the time is ripe for the homebuyers to go ahead with the purchase. (IANS/JC)