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.
