In the first six months of 2021, the Indian housing market has convincingly trounced the disappointment that was 2020. According to data gathered by Knight Frank between January and June 2021, new launches shot up by 71 percent, year-on-year (103,238 launches in H1 2021 versus 60,489 launches in H1 2020) and sales spiked by 67 percent (99,416 home sales in H1 2021 versus 59,538 in H1 2020).
What’s even more awe-inspiring is the fact that the comeback was scripted in the midst of a debilitating and tragic COVID-19 second wave that made the first one last year seem like a ripple. So, how did Indian real estate pull off this heist?
Policy reforms, a key factor
A spate of reforms in the housing sector is a crucial cog in the wheel of revival. "The reductions in repo rates, stamp duty and ready reckoner rates have been crucial in driving the sales momentum in the April-June quarter this year," said Rohit Poddar, managing director, Poddar Housing and Development.
"Lucrative offers from developers have managed to sustain this momentum, and as a result, Indian real estate has witnessed historic year-on-year growth in the first half of the year," he added.
Poddar has a point. Indian real estate, post-pandemic, has been a happy marriage of stamp duty largesse, circle-rate cuts, realistic repo rates from the Reserve Bank of India and calculated business development plans adopted by builders.
Developers reinvent sales activity
"With the foresight of the first wave, developers recalibrated their approach towards new launches to suit the current time, while developing properties that address the current new-age homebuyer demand," Poddar said.
Ram Raheja, director of S Raheja realty credits the monetary reforms, including low-interest rates, as the primary reason for the reinfusion of liquidity. However, timely unlock measures, he added, have also helped with business continuity.
"In Mumbai, the partial lockdown on business during the second wave ensured that these businesses managed to stay afloat," said Raheja, "With a better understanding of the pandemic, real estate stakeholders' preparedness in 2021 has helped residential sales in H1 2021 to exceed the H1 2020 levels."
Growth yet to reach 2019 levels
No doubt, a 67 percent year-on-year growth in sales is indicative of the fact that consumption has increased. However, even this stellar recovery isn’t quite on par with pre-pandemic levels in 2019.
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For instance, while 1.03 lakh homes were launched between January and June this year, that total is still is 3.64 percent below the launch number of 1.07 lakh in H1 2019. Home sales in the first six months this year totalled to 99,416 — a whopping 25.42 percent below the 1.33 lakh homes that were sold in H1 2019, pre-pandemic.
An industry veteran like Niranjan Hiranandani, president of the National Real Estate Development Council, believes this comparison proves that there is still some way to go.
"Indian real estate is witnessing a recovery from the slump witnessed due to the pandemic, but the pace is slow," said Hiranandani, "There are better sales numbers in 2021 when compared to 2020, but there’s room for further enhancement in growth for numbers to be at pre-pandemic levels."
First Published: IST