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The COVID effect on the RE Market

October 11, 2020
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It’s a no brainer. COVID has affected each of our lives and every industrial sector alike. The real estate space that was reeling under a depression has been among the worst affected compelling state governments as well as the central government to offer a stimulus in the form of waivers as never before. So, for the serious home buyer is it a good time to buy? The answer is yes!

In the distant past, we have witnessed several dramatic surges in property prices. We have seen property prices double within two years prior to 1996 and also post 2003. The exponential growth of our economy that followed the IT and BPO revolution put a many to work at salaries never imagined before. With a sudden surge in people’s disposal incomes and the exposure to living standards of the developed world, people sought an upgrade to bigger and more modern homes. This gave never expected boost to the housing sector, resulting in its phenomenal growth. This success led to overtrading and subsequent temptation in engaging in unethical methods and malpractices amongst builders. This resulted in the entire builder community coming to disrepute and losing precious credibility with home buyers. The introduction of harsh legislation such as RERA and the various levies also slowed down the growth within the sector to almost a grinding halt. Property prices reached a plateau and the sector became unattractive to the investor community seeking to earn on property appreciation. The property market is now left with only the genuine promoters who have survived the odds and serious buyers with a large inventory of unsold properties.

The onslaught of COVID brought construction activity at sites to a grinding halt sending all the calculations of the builders and developers for a toss. With legislations like RERA in place and their hefty non compliance liabilities, survival became impossible. It left the government with no option but to relax some of the tax burden on home buyers as an incentive to boost sales to give this sector the much needed stimulus.  Promoters promise waiver of registration costs, stamp duty as well as GST of goods and services tax. They are simply passing on the tax relief that they receive from the government. This relief however is only for a limited period of time. Come 2021 and this relief is expected to be withdrawn. Likewise, in the banking sector, the government has relaxed certain norms and levies to make it easier for the banks and FIs to provide home loans. This in turn would make it easier for the home buyer to get the much needed financial assistance.  Construction activity has now more or less resumed, not exactly to the pre COVID times but almost. Delays in handing over possession may be expected but not significantly.

One of the major survivors in the sector is the Malpani group. With its conservative approach and a focus on giving the highest value to customers, the group has in its pipeline new construction as well as redevelopment projects. The homes include premium luxury apartments as well as affordable to cover the entire spectrum of the home buyer community. The projects include residential as well as commercial construction.

COVID in many ways has come as a blessing in disguise to the real estate sector. It has changed our day-to-day lives in a manner that we have never imagined. We are now shy of stepping out of our homes unless absolutely necessary. This has got many to seriously consider owning a home. The home has become our world now. With the various incentives offered to home buyers through the promoters, the government hopes to stimulate growth in the real estate sector. Therefore, if you are a serious buyer, now’s your time to buy.

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