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Real estate 2021 business pins covid19 vaccine revival government initiatives
  • January 1, 2021
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Real estate in 2021: Business Pins COVID-19 Vaccine Revival Expectations, Government Initiatives

The real estate industry hopes for a recovery of the economy and income levels, as well as demand from home buyers and efficient distribution of the COVID-19 vaccine as we head into 2021.

For several factors, the year 2020 was eventful. In one hundred years, the world experienced its first pandemic, the financial economy came to a standstill, and in a matter of days, millions of people lost their homes and livelihoods.

Real estate 2021 business pins covid19 vaccine revival government initiatives

In the center of all this, aside from technologies and healthcare, there was one area that tended to amaze economists, and this was the property market. In 2020, the Indian housing market saw a significant spike in demand from retail buyers, including individuals purchasing their first properties, as well as others upgrading to a larger home in search of additional accommodation to be used as home offices.

The year, however, brought tremendous difficulties for co-working and commercial room operators, as people moved for much of the year to remote work and online shopping. In 2021, is anything going to change? Most business experts argue that things are undoubtedly looking up.

Expectations for the real estate market in 2021

As a tipping point for 2021, business stalwarts are pinning their hopes on economic growth and the sustainable delivery of COVID-19 vaccines.

As some of the factors behind this unimaginable revival, analysts point to the RBI’s decision to decrease the repo rate and some states’ temporary reduction in stamp duty charges.

There will be a period of stagnation after April 2021, after this process of panic buying, until March 2021. We feel that the central government needs to get loan rates closer to the levels where Western countries lend.

GDP development is expected to turn positive in Q4 of FY2021. We foresee much better days for the economy to move forward with a steady decrease in the number of COVID-19 infections around the nation and the vaccine around the corner,” says Kaushal Agarwal, chairman of The Guardians Real Estate Advisory.

However, the Coronavirus mutation was seen in the United Kingdom and lockdowns in some European countries could dampen investor sentiment early next year.

 

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Industrial Real Estate Future in 2021

There is a ray of optimism for the co-working and industrial office room segments, as companies intend to get their workers back to work and practice hybrid remote working. The stakeholders are optimistic that the best for the segment is yet to come and that, with time, investors can get their due return.

Owing to the pandemic, co-working spaces around the world experienced a dramatic drop in sales. Now that companies are resuming business, in the coming months, co-working spaces are expected to see incremental penetration.

Bigger companies will opt for smaller rooms on a moving basis to fit their workers. In addition to this, start-ups emerging in tier-2 and tier-3 cities can also raise occupancy in local co-working spaces,” explains Abhay Chawla, co-founder of India Accelerator, India’s mentorship-driven technology business incubator.

Because of the new offers and demand for effectively built office spaces, the commercial sector, like co-living and co-working, could bounce back. REITs will also become an enticing proposal again if this picks up.

In 2021, commercial assets may be of considerable importance, as the pandemic has encouraged working professionals to cooperate creatively and successfully through numerous innovative instruments. We might see greater use of tech-enabled assets that provide lots of versatility and increase productivity with the reopening of offices.

In addition, the commercial real estate sector could see greater investment prospects in 2021 with SEBI revising certain rules regarding REITs,” says Annuj Goel, CMD, Goel Ganga Developments.

According to some analysts, the migration of refugees to metro cities would bring back the need for quality housing if and when businesses reopen.

For urban refugees, co-living spaces and communal housing will increasingly become a need as they adapt and become acquainted with the new standard. Co-living will continue to be a profitable company as long as there is a growing demand for inexpensive housing in cities,” insists Kahraman Yigit, co-founder and CEO, Olive by Embassy.

Real estate 2021 business pins covid19 vaccine revival government initiatives

In 2021, big developments to watch out for

The market for roomy homes

The continuing need for bigger homes with extra rooms or spaces to be used as offices would be the largest development to look out for. Extra space would be a welcome move for young customers, who are willing to work from home rather than commuting long distances to the workplace or paying higher rents to stay near the office, while people transition to the new standard.

In addition, as the delivery of vaccinations in India is still going to take time, the reopening of offices does not occur at maximum volume. For the millennial workforce, work-from-home would be the rule until then.

The idea of OBHK (Office-Bed-H-K) would get more traction from home buyers, given access to vaccinations would take time and the existing work-from-home scenario, says Chintan Sheth, Director, Ashwin Sheth Group.

New releases to pick up

As India went under a full lockdown in March 2020, labor force migration produced a shortage of manpower at construction sites, affecting project launches and deadlines for delivery. Although in big cities, the shortage of construction workers is still a challenge, new launches can now resume.

However, due to the risk associated with the above, individuals will also choose ready-to-move-in homes over under-construction properties.

We expect the aspiring market to continue leaning toward ready-to-move-in apartments and to lead to strong sales and cash flow for organizations in the luxury sector. However, the latest releases that have been slow this year will take center stage,’ adds Ajay Singh, assistant VP-sales, Century Real Estate.

Evolving marketing and creativity in technology

In order to attract customers, real estate brands went the extra mile. The real estate sector saw new levels of technical advancement, from video walkthroughs and augmented reality videos, to virtual site tours and inventory collection, including by those consumers who were not familiar with the technology.

In real estate, the role of technology has increased, with developers using 3D walkthroughs and virtual reality to enhance consumer service and retain sales momentum, while also concentrating on evolving design methodologies.

In order to promote the purchasing process and improve the sales experience, digital platforms such as AR/VR helped to build the virtual image of projects for new inquiries, along with 24/7 chatbot services and video calls,” explains Reeza Sebastian, president, residential business, Embassy Group.

Thanks to technology-enabled technologies, the new-found prosperity for real estate sellers is the successful involvement of NRI buyers. For overseas buyers, who used to rely on their domestic resources for property scouting, site visits, and even property documentation, the early acceptance of technology by the real estate sector is a welcome move.

Real estate is almost all guided by what people desire and that has been made clear by the latest pandemic. What’s more, we should look forward to the active involvement of NRI customers in terms of finance, who want to pursue lucrative investment opportunities in India,” adds Goel.

 

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In 2021, legislative boost to real estate

By implementing a range of measures to improve home-buying, the government has managed to hold the industry afloat. Though most analysts agree that property registry fees should be reduced by all state governments, there is also some subdued pressure for new steps to raise investment from second-home buyers and developers.

In making homeownership more affordable and hassle-free, government funding will play a transformative role. The nationwide decline in interest rates and the reduction in stamp duty are very welcome moves in this direction for the affordable segment in Karnataka.

We hope the government will take steps, such as upgrading infrastructure, connectivity, etc., to improve the real estate market. For first-time buyers, this will ensure growth and affordable options,” says Singh.

In addition, repo rates, which have been kept low this year, will rise to contain inflation in the next financial year. As a result, analysts are skeptical and say that funds should be made available to consumers and companies, even after March 2021, to keep the momentum running.

We may not agree that the government can lift interest rates when the economy has just begun to get stronger and recover. The government should make more funds available to companies, as well as end-users, in the coming days,” says Goel.

The tax incentives of incentivizing home sales are a long-standing market requirement. To keep the number of real estate purchases inspiring, this may be the path forward for the government in the 2021 Union Budget.

Individual tax incentives, along with higher income tax deduction caps, would help taxpayers’ lakhs. This will induce and inspire home buyers to purchase homes. In addition, further waiver of stamp duty, reduction of ready reckoning prices, and reduction of GST to zero would enable home buyers to make transactions and increase consumption.

 

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Disclaimer: The views of this expressed above are for informational purposes only based on the industry reports & related news stories. Navimumbaihouses.com does not guarantee the accuracy of this article, completeness, or reliability of the information & shall not be held responsible for any action taken based on the published information.
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