The COVID-19 lockdown has accelerated technology-led homebuying in India, making it possible to inspect properties online as well as negotiate and finalize deals. Virtual site visits are now a firm reality and a large chunk of the property selection and purchase process can now be done digitally.
There are altogether over 6.1 lakh affordable units under construction across the top 7 cities, of which NCR and MMR alone account for nearly 59% – or 3.59 lakh units. These units were launched between 2013 to 2019. Both cities together also have a 57% share (approx. 1.34 lakh units) of the overall unsold stock of 2.34 lakh units in the budget homes category. (Unsold affordable stock consists of both under-construction and ready-to-move homes.)
The affordable housing segment, which gained significant traction over the last few years, may also take a hit by COVID-19. The outbreak will significantly affect affordable housing’s target audience. With limited income and unemployment fears, buyers of affordable housing may defer purchase decisions, leading to an estimated 1-2% rise in unsold stock within this segment in 2020.
The three southern cities collectively saw residential sales of 61,400 units between January and September 2019 as against 64,420 units sold in the first three quarters of 2018. MMR and Pune, on the contrary, saw the sale of nearly 93,930 units in 2019 against 70,740 units in the corresponding period in 2018. Altogether, the top 7 cities recorded sales of 2,02,200 units in 2019 till September, of which western cities comprised 46% overall share while southern region consisted of 30% share.
After nearly two-and-half years since RERA deployment across the country, the Centre’s aim to enforce it in each state to regulate the Indian real estate sector has picked up momentum. There has been a 40% growth in project registrations under RERA in a year across the country – from around 32,306 projects in end of September 2018 to nearly 45,307 projects as on 5th October 2019.
In the late 2010, buyers were largely in the age groups of 35-45 years and 45-55 years, but the share of homebuyers in the 25-35 years age group was minimal. However, improved tax benefits motivated more working youths in this age bracket to opt for home loans. Millennials predominantly favoured paying EMIs for buying a home over the ‘dead’ expense of rentals.
The festive season has traditionally been an active period for real estate sales as many buyers consider Navratri and Diwali an auspicious time to buy property. Like in previous years, developers this year have sweetened property deals – some up-front discounts, or more commonly 0% GST (which is in any case not charged on ready-to-move properties), waived stamp duty and registration charges, free reserved car parking, modular kitchens, etc.
In the April-June 2019 quarter, India’s GDP grew only by 5% – the slowest pace in over six years. Consumers are spending less on everything from FMCG to automobiles – and, of course, real estate. Naturally, the sector eyes RBI’s monetary policy for cuts in the key lending rates to support the various measures taken by the government to boost consumption sentiment.
Among the major factors contributing to the escalating ‘claustrophobia effect’ of shrinking apartment sizes, demand for affordable homes in metros tops the list. Also, buyers are increasingly looking to avail the government’s credit subsidy benefits for affordable housing. These require a home to be priced
There is no simple yardstick to calculate the exact number of units and the actual funds that are needed to complete them. Each delayed project is different in size, stage of completion, city and micro-location, etc. Also, various methodologies are used to reach an approximate number. After considering the government’s caveats – non-inclusion of projects under NCLT, and inclusion of mid and affordable units only, ANAROCK has shortlisted units launched in 2013 or before.