The affordable housing segment, which gained significant traction over the last few years, may also take a hit by COVID-19. The outbreak will significantly affect affordable housing’s target audience. With limited income and unemployment fears, buyers of affordable housing may defer purchase decisions, leading to an estimated 1-2% rise in unsold stock within this segment in 2020.
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.
Track2Realty picks up Investment Magnet Cities of India through a comprehensive pan-India survey. The idea is to identify the top real estate destinations for the home buyers in the country.
The festive season has traditionally been an active period for real estate sales as many buyers consider Navratri and Diwali an auspicious time to buy property. Like in previous years, developers this year have sweetened property deals – some up-front discounts, or more commonly 0% GST (which is in any case not charged on ready-to-move properties), waived stamp duty and registration charges, free reserved car parking, modular kitchens, etc.
There has been a slump in the market. Huge unsold inventory has forced firms to not increase their rates. As a result, prices have remained range bound. With fewer launches, market is ready for homebuyers willing to take the buying decision. The unsold inventory during first nine months (July-September) of 2019 was 444,673 units, registering a small drop as compared to the corresponding period in 2018. While there has been a revival of sorts in sales since 2018, developers are still not out of the woods.
Among the major factors contributing to the escalating ‘claustrophobia effect’ of shrinking apartment sizes, demand for affordable homes in metros tops the list. Also, buyers are increasingly looking to avail the government’s credit subsidy benefits for affordable housing. These require a home to be priced
There is no simple yardstick to calculate the exact number of units and the actual funds that are needed to complete them. Each delayed project is different in size, stage of completion, city and micro-location, etc. Also, various methodologies are used to reach an approximate number. After considering the government’s caveats – non-inclusion of projects under NCLT, and inclusion of mid and affordable units only, ANAROCK has shortlisted units launched in 2013 or before.
Additionally, the fact that the corpus will be completely professionally-driven including real estate experts, banking or housing finance specialists, it is likely to move more smoothly and in the right direction with little scope for misadventure. These specialists will need to identify such projects that are affordable and middle-income projects and are in need of last-mile funding for completion. The government’s move to relax commercial borrowing for affordable housing is another welcome step.
The city with a penchant for villas is mostly moving towards the periphery locations. In those locations the land cost is still very affordable. The buyers, mostly local communities, are preferring these plotted villas. Since the developers do not have the construction finance to bother, they can even hold it in the wake of slow sales.
Even as India’s middle-class grapples with the prospect of an uncertain future in their careers and financial ability – the main drivers of housing demand – the rise of India’s super-rich continues unabated. According to Credit Suisse report, there were an estimated 3.42 lakh dollar-millionaires in India as on mid-2018 who collectively held around USD 6 trillion. It is forecast that 5.26 lakh Indian dollar millionaires’ wealth will be around USD 8.8 trillion by 2023. Market fluctuations make very little difference to the personal networth of these individuals.