Real estate sector is gradually emerging out of the clutches of the long prevailing slowdown and the fact has come to the fore through the recent FSR report by the RBI.
The FSR report highlights that the residential real estate sector has recovered since the unsold inventory level has come down to a two-year low. While the easy loan dissemination policy of the banks is proving to be a huge support for the homebuyers, due to its positive effect the unsold housing units inventory has come down to 7 lakh from the earlier 8.5 lakh units reported in the first quarter of FY20.
Further, the stamp duty cuts in some of the states as well as the easy loan dissemination policy of the banks has resulted in bringing the unsold inventory level come down to the two-year low. The revival of the housing market had been adversely affected by the spread of the pandemic and the restriction applied due to it. However, as per the report, already in the third and fourth quarters of 2020-21, the housing property registration and sales across major cities exceeded the pre-pandemic average levels.
The rating agency CARE Ratings has in the meanwhile, highlighted that even though the lower inventory of unsold housing units have come down considerably, still it would take more than 45 months to clear the backlog
According to the industry experts, the demand in the residential real estate sector may see further uptick after the pandemic gets fully controlled and the economy bounces back on the high growth trajectory. Even the purchasing managers’ index (PMI) report unveiled by HIS Markit for the month of June shows the services sector has witnessed sizeable contraction and the Indian economy is currently marred by job losses.
However, says the real estate veteran Niranjan Hiranandani, National President, NAREDC, “It is due to calibrated economic approach that there is a quicker shift in demand backed by the perspective that owning a home is imperative for future living.” He adds that the favourable home loan interest rate and fiscal impetus, coupled with the attractive deals offered by the real estate developers are attracting the discerning homebuyers. Moreover, “the demand for larger and luxury homes is gaining pace on the back of the remote working and the digital education trends.”