The economic uncertainties stemming from the outbreak of the unique coronavirus should, in many respects, have been the last nail in the coffin for the already ailing real estate industry. However, rational rationing strategies have been constructed by the builders which have helped out in retaining their cash flows as well as fulfilling the desires of the homebuyers. To one’s amazement, the COVID 19 outbreak has been beneficial and opened doors for some making investments that were otherwise unavailable.
Importance of Real estate Sector In Indian Economy
We all accept that agriculture accounts the most income in India, however real estate is standing in the second position contributing the share of GDP in the Country, real esate is still much lower in India as contrast to Fusion. Real estate is expected to add up to 13% of Indian GDP by 2025. This sector has a great promise of growth because it meets the housing demands of the population that will be increasing in the years to come provided that the necessary changes are undertaken in time.
COVID-19 Construction Industry Impact
The sudden lockdown imposed in March 2020 by the governments most affected all spheres, including the construction sector. There were labor deficiencies combined with interruptions in the global material supply chain which saw the suspension of many new works especially in cities like Mumbai and Bangalore. In addition, potential buyers refrained from purchasing properties due to the uncertainty of the pandemic as well as the decreased source of income.
However, towards the end of June 2021, as lockdowns were lifted, economic activities, commuted migrant laborers, and government-led stimulus programs were reintroduced. These factors helped improve conditions in the property market.
Real Estate Improvement Trends
Some trends indicate that the real estate sector has begun its revival and there is hope for a gradual progression. One fundamental reason is the rapid adoption of the internet as a means to achieve objectives that were considered impossible without being physically present, such as working from the office, attending lessons, or going for meetings. With many places now under the second wave of COVID, it is evident that most activities will still be focused at home for some time.
What Changed In The Perspective Towards Investment In Real Estate
Greater Role Of Real Estate Import In The Asset Portfolio
This paradigm shift has made real property one of the top prioritized asset classes among the investors. The feeling of confidence that comes with having a house has increased mainly due to the growth of the so called ‘Work from Home’ culture. This trend is likely to grow into a ‘Work from Anywhere’ scenario especially in technologically developed cities such as Bangalore, Hyderabad, Pune, Delhi and Mumbai.
Legal Instruments Encouraging Investors’ Trust
Market recovery by homebuyers is on the increase because of legal instruments such as the Bankruptcy and Insolvency Code and RERA. Such mechanisms tend to promote and alleviate issues concerning property occupancy, delivery and enforcement.
Government’s Bold Step on Fractional Ownership
The emergence of fractional ownership of leisure timeshare properties coupled with tax breaks has incentivized such buyers who wish to venture into real estate industry. These measures are working towards bridging the void causing by the recession of the market, which is a positive outlook.
Globalization in the Real Estate Sector
Government Subsidies in the Zero GST Scheme
The government has come up with basement level subsidies in the Zero GST scheme in order to promote real estate development since it aids in the launching of new construction projects. The Reserve Bank of India (RBI) has characterized returns on funds put into real estate investment returns as considerable, which was a further motivation of those people for investment.
How has the RBI Helped Borrowers.
Due to the RBI’s policy on surplus of restrictions on the personal loans, simple taxpayers have since been able to repay their loans and even mortgages without going bankrupt. This measure has proved worth it since it has contributed towards the recovery of the Real Estate Market in the course of the recession.
Conclusion
Low-cost housing for a segment of the population that earns between the minimum and the average wage could revive a sphere that has lost its luster due to the pandemic. It is keenly evident that, while some changes, such as “Work from Home” and “Work-action” have stimulated the growth, there are other stimuli that have to be supported toward proper development of the right policies and funding.
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