Demand for residential real estate surpasses pre-COVID level

Though the COVID-19 pandemic wreaked havoc on the Indian economy, the real estate industry has registered a growth in demand as property searches jumped by 30-40% when compared to pre-COVID levels. It would however be interesting to note that the buyers have shown a marked preference towards affordable and mid-segment properties.

Experts’ Opinion

Commenting on this phenomenon experts opine that the coming 6 months would be important for the revival of the residential sector. They further point out that the onset of the pandemic and the subsequent lockdown changed consumer preferences. Today the focus is solely towards affordability as buyers have reduced their budget though they have not changed their preference either for BHK or size.

Festive seasons witnesses a spurt in demand

The festive season witnessed a sharp recovery in demand while the prices remained stable for July – September quarter after falling by 5% in the April – June quarter of 2020. This bodes well for the industry while the experts hope that the consumers buying sentiment will continue to improve and turn into a transaction in the coming quarters.

Lockdown opens up a range of Opportunities

It was witnessed that the concerns regarding liquidity crunch and falling levels of transaction reached disturbing levels during the pandemic. The lockdown however opened up a range of opportunities as well as interesting buyer trends as consumers reduced their budget and showed a willingness to move towards smaller locations but did not compromise with the size of the house. This trend indicates the working professional’s emerging requirement of additional room in the houses to meet the requirement of changing the lifestyle of having to work from home. However, it must be added here that it is too early to predict whether these trends would continue in the long term and how the developers would meet this changing trend in consumer demands.

Real Estate market at a regional level

At a regional level, the southern market of Hyderabad has shown slight recovery and registered price increment of 2% in Q3 2020 after suffering a drop of 5.2% in Q2. The real estate prices of the Mumbai Metropolitan Region (MMR), on the other hand, recorded a marginal improvement in the quarter. The NCR region, including, Gurugram and Noida recorded a marginal increase in prices as well.

The real estate market in Bengaluru is in a recovery mode as the searches for property increased by 43% in Q3 after suffering a fall in Q2 because of the lockdown. Chennai shows modest recovery with a focus on affordable housing. Property search in the area is increased by 35%.

Delhi witnessed a turnaround with searches mostly hovering near employment hotspots. Ahmadabad witnessed a substantial rise in the residential demand as property searches showed a massive leap of 144% after undergoing a fall of 51% in Q2 2020.

Final Thoughts

The aforesaid write-up brings to fore the fact that residential real estate is witnessing a spurt in demand that surpasses pre-COVID levels in some regions. On the other hand, it should also not be forgotten that the steps taken by the government like extending RERA deadlines, reducing stamp duty as well as liquidity infusion in stressed projects through the SWAMIH fund (more than 100 projects approved till date) are expected to boost the confidence level of the buyers as well as help the developers which bode well for the real estate sector in the country.