How to Increasing demand for commercial property in India...?

The real estate sector has been a major contributor to the growth of the entire economy and is expected to contribute in approximately 13% of the country's GDP over the next 5 years. If we talk about improving the business environment, then the commercial real estate sector can be considered a major beneficiary. The sector has been promoted with government initiatives such as RERA and GST, which allowed large institutional investors to make large investments in commercial property in India, thereby improving the overall business conditions of the country.

The continued expansion of the service sector has led to the increasing demand for office spaces and thus can be considered as one of the major growth factors of the commercial real estate segment. It is estimated that the average demand for office space across India will increase to 46 million square feet by 2021.

Policy reforms such as REITs (Real Estate Investment Trusts) will further promote the development of the commercial real estate sector by reducing the burden of capital costs of projects financed on real estate developers.

Increasing FDI in the e-commerce markets has fueled the growth of the warehousing and logistics sector and further increased the demand for commercial space benefiting the commercial property sector in India.

The retail space is also expected to witness strong growth in the coming years and is expected to grow at a rate of 25% to 30% in the next financial year. Finance Minister Sitharaman's Budget 2020 has also brought some good news for the commercial real estate sector. Establishment of new smart cities, development of around 100 new airports across the country, formulation of national logistics policy, announcement of National Infrastructure Pipeline will likely increase the demand for commercial real estate sector especially office segment.

Increasing interest from house-buyers as families stay at house

Although the residential real estate sector was expecting zero sales from the first quarter of the new fiscal year, the lockdown has surprisingly brought people closer to the desire to buy a house.

The current epidemic has had an unprecedented impact on the residential real estate market. With families spending more time in the home, organized real estate players have seen increasing interest among buyers. Potential buyers also include NRIs, who are demanding digital presentations from developers in metro cities. Weak rupee depreciation and low interest rates are also factors contributing to the decision.

With work-from-house being the new normal, even existing buyers are changing their existing bookings as they look for larger apartments. While the numbers are still not comparable to March quarter sales, large developers say there is latent demand but for this to translate into sales, the job market and economy will have to respond better.

Many developers feel that there will be not only a recovery, but also a rebound in residential. The decision to favor decision-making has accelerated due to houses being closed for two months. Noteworthy recovery may take 6-12 months as real estate is a highly suppressed category, but expect first-time house buyers and mid-segment buyers to take advantage given the experience in the last two months will be encouraged.

According to research, demand was seen in the top two cities in India in the last two years, with unsold inventory levels falling 7% in 2018 and 4% in 2019.

In the first 40 days of the lockdown, the Maharashtra government has reportedly seen the sale of only 3,806 properties, which earned the state a nominal amount in registration fees. Typically, the state government earns Rs 25,000 crore per year from the real estate sector. While many state governments have allowed online registration, developers say they expect not only a return but a demand for rebound.

As far as demand is concerned, there are some very interesting patterns. Developers and real estate companies are questioning people who have never visited the site and are responding to digital advertisements. It can be said that consumers are realizing the importance of owning a house. People have started research and are ready for minimal transactions. A strong demand revival is expected once the lockdown is lifted, provided people have a fixed job.

Although the outlook is more promising for the residential sector than retail and commercial, a visual recovery is at least two years away. Developers believe that the digital sales trend will also grow in the coming years as innovative sales and marketing solutions are being worked on and drone shoots and virtual tours are becoming more and more common.

India Prime Minister Announces Rs 20 Lakh Crore Incentive to Combat Corona virus Fallout

Prime Minister Narendra Modi announced a stimulus package of Rs 20 lakh crore to support the economy after the Corona virus crisis on May 12, 2020.

As India planned to enter the fourth phase of lockdown from May 12, 2020, to prevent the number of coronovirus infections, Prime Minister Narendra Modi announced on May 12, 2020, Rs 20 lakh crore to support the economy. Announced an incentive package. Narendra Modi extended the lockdown in India until May 30, with some ridership as Asia's third-largest economy attempts to mitigate the widespread damage caused by the epidemic.

In the coming times, Finance Minister Nirmala Sitharaman will provide details of the mega package, which is one of the world's most important stimulus packages against the epidemic. While Japan has announced a $ 992 billion coronavirus relief package that accounts for more than 21% of its GDP, the $ 2 trillion stimulus package announced by the US serves about 13% of that country's GDP.

India's support measure is likely to focus on tax breaks for small businesses and incentives for domestic manufacturing. Being the second largest employer in the country, real estate can be a major beneficiary of fiscal stimulus, Collier International India said in a statement.

Important is that the new package, which is equivalent to about 10% of India's GDP, includes the first Rs 1.7 lakh crore package announced in March 2020, as well as liquidity measures in various measures initiated by the Reserve Bank and Interest included Rate cut.

Corona virus stimulation package in India

The Center and the Reserve Bank of India (RBI) have announced a slew of measures in the past to support the economy as analysts predict a prolonged national lockdown to counter a corona virus outbreak in India's first-ill. May push economic growth to a three-decade record less.

In India, the number of infections has increased to 81,970, while the number of deaths by May 15, 2020 has risen to 2,649.

After the central government announced a Rs 1.7 lakh crore incentive package to provide direct cash transfers and food security measures to millions of poor people due to the lockdown, RBI announced a 75-basis point shortfall The interest rate, after an emergency meeting through video-conference of its Monetary Policy Committee (MPC) on March 27, 2020, to bring it to 4.40%.

A nationwide lockout that has forced India's 1.3 billion people to live in millions of low-income homes indoors, relying on daily wages to sustain their livelihoods in Asia's third-largest economy, which weakening economic activities in the country is also the weakest and brought many companies to the brink of bankruptcy.

How will corona virus affect the Indian economy?

ICRA states that India's growth fell to a six-year low of 4.7% in October-December 2019 and may decline to 2.4% in January-March 2020. On the other hand, rating agency Moody's projected job losses to accelerate in countries after COVID-19, resulting in widespread loss of income for businesses and individuals.

Impact on Indian Housing Market due to COVID-19

Corona virus proliferation has further delayed a recovery that may be due to measures launched to revive various government demands, however, it does not appear that prices will fall immediately. Niranjan Hiranandani, national president, NAREDCO, says that "reviving Indian realty is the second largest employment generator, not only from the point of view of GDP growth, but also for job creation as the multiplier effect of more than 250 affiliated industries in the region is.

Recently, the Center announced more tax breaks and lower interest rates on home loans to make purchases more attractive, besides setting up Rs 25,000 crore stress fund for speculation.

He called for a slowdown in the residential segment, which has already stalled housing sales, project launches and price increases in India's residential realty sector, which is under pressure due to mega regulatory changes due to Real Estate Regulatory Authority (RERA), Goods and Services Tax (GST), Demonetization and Benami Property Law.

According to rating agency ICRA, the epidemic, if not soon included, will not only significantly affect the economy, but will adversely affect the cash flow and project delivery capabilities of developers.

"Although in the case of a prolonged outbreak, the impact on overall economic activity is likely to be deeper and more sustained, resulting in a more significant impact on developer cash flow and project execution capabilities, leading to a wider credit negative impact." ICRA said in a recent note that the three-month deferment announced by the RBI on loan on March 28 would provide some comfort to the builders.

“The injected liquidity of Rs 3.74 lakh crore (by RBI) with a three-month moratorium on all loans by financial institutions will ease short-term liquidity concerns and help developers as well as homebuyers. It is a great relief for developers and buyers to help ease the challenges they currently face,” says Ramesh Nair, CEO and Country Head of JLL India.

Anticipating the delay in completion of the project and supporting the builder community, the Real Estate Regulatory Authority in Maharashtra has announced a 3-month extension in the completion deadline of the project.

Recall here that real estate developers in Mumbai, the state capital and India's financial nerve center, have the largest selling stock in the top nine markets.

“Due to the 21-day lockdown outbreak of COVID-19, both manufacturing and sales activity has come to a complete halt in the entire real estate sector. At many sites, construction workers have also moved back to their hometowns. Even after the lockdown, the activity will only recommend slowly, which will cause project delays anywhere between at least 4 to 6 months,” said Sharad Mittal, CEO and head, Motilal Oswal Real Estate Funds. Welcoming the announcement of Maharera, Mittal said that although it cannot fully compensate the sector with actual project delays that are likely to be direct, 'it is certainly a decision in the right direction, to support real estate developers and the region. Overall in this global crisis.

STAY HOME, STAY SAFE, STAY ALIVE

Corona virus outbreak 2020 - affects real estate growth in India?

Today, at the endemic of this severe corona virus, experts are busy calculating abnormal human loss worldwide. People are suffering or out of home due to the outbreak of this virus. In the meantime, the effect of the unexpected opposition to this deadly virus spreading on the global economy has been agreed.

Considering COVID - 19, the estimated loss to GDP in the world so far has been assumed to be 0.2 percent. For the grace of God, the effect is by no means limited in India. But in this scenario, it is clear that the Indian economy, which has already seen a 4.5% lower growth in the July - September quarter, will probably not remain uninhabitable due to the worldwide economic slowdown. And, the realty industry of the Indian residential market is telling a different story altogether.

COVID - 19 affects the property market in India

If the data collected from SuGanta.com is analyzed together, it is clearly visible the fall of 9 important residential markets of India by 30 percent during the time span of October to December last year. It is deteriorating for the fifth consecutive time of Q3 financial year 2019.

The trend is also the same for the launch of new projects. Since the third quarter of the last financial year, the task of starting new projects has been facing a continuous decline in the mega markets. This caused an annual decline of 44% in the October to December time period.

Despite all the government-issued schemes, including the lowest interest rate on home loans and the maximum tax exemption on purchasing any residential property in India for the first time in the history of real estate, all efforts failed to revive property demands among homebuyers are in India. He still chose to remain unaffected by all the tricks played by the stakeholders to force him to go out of his fence. For example, the government took an action to limit GST to 1% for affordable flats, which also went into the vein.

Usually, the craze of buying and selling property in India increases during the festivals of October to December, which did not happen even in 2019. And now in early 2020, there has been an outbreak of the corona virus. And, it has also probably brought the worst times in the residential property market in India. 1705732 Corona positive cases reported globally as of April 10, 2020. And, it is only growing and causing more fear around the world.

The rate of property visits has fallen surprisingly

Well, impressed by the government's plans, given how interested some consumers were in searching for property on the Internet, the Corona virus outbreak just seized them again from doing any such thing. To date, on April 10, 2020, India has reported 7600 corona positive cases. The activation of social media and news channels has succeeded in making people truly aware of COVID - 19 and everyone tries 'Stay Home Stay Safe'. People are really creating social distance by listening to the words of PM Modi. Currently, India is on a 21-day long social lockout to stop the spread of pollution. So, in such a scenario, nobody is dreaming for a site coming to buy a property in India.

Plans for project delays !!

Indian real estate is largely dependent on China, which is the source for COVID - 19 outbreaks. India needs support in matters of sourcing home furnishing essentials, construction materials, plastic to steel to electronic materials and construction equipment from China. Now, India needs to look for alternative sources as China is busy controlling the epidemic of viruses. It will shoot project delays to make sure.