Budget after budget the industry voices across the built environment of the Indian real estate echo the causes & concerns of the supply side – builders. On the eve of the Union Budget 2021-22, it is imperative to address the issues that affect the demand side – buyers. Failing to address the buyers issues, would be detrimental to the revival of the sector which, in turn, is critically linked to the revival of the economy at large.
Beyond the pessimism & optimism and, to some extent, more than expected recovery post the Covid-19 lockdown, the fact remains that 2020 has been by and large the most unforgettable year for the economy in general and the real estate market in particular. The old timers in the business even maintain that this has been even worse year than the global economic collapse after the Lehman crisis in 2008.
While the COVID-19 has by and large dented the confidence level of the real estate developers, Aditya Kushwaha, CEO & Director of Axis Ecorp believes there are silver lining for the players who are forward looking in their approach. In an exclusive interview with Track2Realty, Kushwaha asserts that the Work From Home trend would shift the focus from top metro cities to open spaces in and around the tourist destinations. He therefore urges the government to look at the Holiday Home segment as a priority sector.
For the real estate, it seems the government message is that if you wish to revive than learn to survive on your own. Unfortunately, in a market loaded with housing inventory, added with the liquidity crunch, the over-supply could only be absorbed with the revival in demand. There has been no announcement as to how the government would ease the stuck up projects after its initial stressed funds.
Traditionally, the festive quarter fares better than the previous quarters of the year when it comes to housing sales – the combination of religious sentiment and festive deals and freebies is a potent mix during this part of the year. For instance, Q4 2015 saw 70,000 homes sold in the seven major cities. However, as tempting as it was for developers to believe that this was an unshakeable performance standard, it was certainly shaken just a year later. After demonetization (DeMo) was announced in this critical quarter in 2016, housing sales halved to 32,100 units.
Without compromising on fiscal prudence, the Finance Ministry will have to present a budget that is not only inclusive but also assures growth across industries. It clearly shoulders a considerable share of responsibility for retaining India’s position as the fastest-growing economy.
The Indian real estate market has always been notorious for its lack of transparency, and the changes in recent times has been less than desirable. As India aspires to get clean money into the sector, the foreign funds too have high standards in terms of service quality and clarity.
As per the recent Bangalore Development Authority’s (BDA) Revised Master Plan 2031 report, Bengaluru’s 1.18 crore citizens waste 60 crore man hours annually. This translates to INR 3,700 crore, including INR 1350 crore on fuel alone, and the rest on productivity (man hour) loss.
A budget bonanza is a wish that businesses across the sectors dream about and real estate is no exception. Real estate, as a matter of fact, has to its claim being the key contributor of GDP and job market, besides accelerating a number of allied industries through backward and forward linkages.
It is true that the GST burden is today a huge deterrent in the housing market and a large share of homebuyers are now waiting for the project to be ready as the ready to move apartment won’t attract GST burden. The problem, however, is with millions of buyers who are in the mid cycle of construction and the GST has suddenly added to their already over stretched budget in the housing market.