Pandemic has accelerated sales of residential properties in smaller cities because some of these living spaces are available in developed and habituated townships. Demand for condos and integrated townships in Tier II cities has also seen a surge, with increased need of safer environment and amenities within gated communities.
Organisations are planning to continue work from home and policies like Atmanirbhar Bharat and Make in India will create opportunities in tier II & III cities.
Reverse migration is also likely to continue for some time so demand in these cities will increase. If you analyse residential sales from 2014 to 2019, tier I cities grew at 28%, but tier II grew faster at 51%.
Tier II and III cities have witnessed considerable rise in demand in the recent past, primarily due to accessible pricing, more space, better returns on investment and lower cost of acquisition, mostly for ready to move in units according to senior executive director, DLF Home Developers Ltd.
After Pandemic, there is a rise in trend among homebuyers to build a lifestyle away from the hustle of a metropolitan cities. People are buying well-developed plots and independent villas instead of houses in group housing societies or in high rise buildings.
State Bank of India chief general manager O P Mishra has assured the real estate industry and the builders’ fraternity of all possible support to address various issues concerning them at a meeting with the CCREDAI-Hyderabad.
Key points of the meeting were to:
- Strengthen the relationship between the bank and developers and to discuss issues relating to home loan sanctions, project tie-ups and project funding.
- Favour more meeting with builders and the industry at frequent intervals so that various aspects concerning them could be discussed and action initiated.
- Assurance that other issues which required the intervention of the centre would be taken up.
He said the main points arising out of the COVID-19 pandemic had been addressed to a large extent through relief measures like moratorium on EMIs, charging of simple interest during moratorium period and extending emergency line of credit to builders.
In a significant change to the Karnataka Land Reforms Act, 1961, Governor Vajubhai R. Vala on 13/07/2020 signed the Karnataka Land Reforms (Amendment) Act, 2020, a month after the Karnataka Cabinet passed an ordinance making amendments to the Karnataka Land Reforms Act, 1961. Following the Governor’s consent, the State Government has notified the Amended Act in the Gazette notification.
Accordingly, the amendments –
- Allow Non-agriculturist to purchase agricultural Land (Farm land) in Karnataka. However, restrictions on purchase of irrigated land by non-agriculturist remain
- Removed the ceiling on income from non agricultural sources to buy agricultural land
- Also increased the ceiling on number of units of land a person/family can hold
Accordingly, Sections 63(A), 79(A), 79(B), 79(C) in the existing Karnataka Land Reforms Act, 1961, were repealed to enable these changes.
With these changes –
- Farmers are expected to get better prices for their land
- Organised farming will get a fillip
- Technology adoption & modernisation of agricultural practises is expected to increase
Reduce corruption & promote industries alike
Post COVID 19 is a new normal & the surge of migrant workers & all citizens in general, wanting to return HOME during this lockdown is a testimonial of the fact that a HOME is close to everyones heart and those in Housing business will always remain in business, provided they are in sync with the realities of the times. Today the buzz word is AFFORDABILITY and developers offering a HOME in the affordable segment will always find takers.
This brings us to the next question – Will prices correct post COVID 19?
Every other year in our country, we have a new regulation being passed which has a direct impact on REAL ESTATE Industry. A popular study shows that builders & land developers have already absorved an additional cost of upto 20% on account of GST, RERA, compliances under various other statutes, etc where as the selling price has remained stagnant. This effectively means that developers are already subsuming the 20% cost surge, without being able to pass it on to the consumers! Prices have bottomed out completely and this is the best time for anyone looking to buy a home or a plot.
Will Real estate in India survive as an investment option?
The following points convince us beyond doubt that the Indian real estate story is alive & kicking.
- The whole world has looked upon India with appreciation for the manner in which it has tackled COVID 19 and most of the NRIs want to invest back in this safe country which values people’s lives more that anyother thing.
- With the USD – INR exchange rate at an all time high and with reverse migration happening, homes in India have become much cheaper for NRIs to own
- Mutual Funds & Stock markets have fared adversely during these times with investors loosing over 50-70% of their investments. Historically, Real Estate held for 5 – 10 years has led to tremendous appreciation in value.
- COVID 19 has made people realise the value of owning a HOME. It is the best place to stay at during an extended lockdown. For those who do not own a home, they aspire to buy one and those who already have one, are looking to upgrade or have a second home with health & other amenities as a safe bet
- Millennial’s who hitherto were going ‘asset lite’ and preferred ‘Co-Living, Co-Working’ spaces will see a gradual shift to owning a Home, be it small or big. It gives a great sense of security during trying times.
- With Work From Home catching in, a HOME is of prime importance
- With the recent measures announced by the RBI, interest rates on housing loans will come down drastically. This will an added incentive for homebuyers
In summary Home is the only asset class which one can occupy, it provides a great Sense of security, a feel Good Factor and Long term capital appreciation!
So, once you have zeroed in on a project with a credible builder who complies with RERA and other local regulations, don’t have a second thought, just make your purchases as prices are bound to tick upwards.
Channel partners & Real estate agents have always been an integral part of the realty sector. With the unparallel growth of Indian Real Estate, developers have been rapidly engaging with Channel Partners. Earlier, Kirana shop owners, small-time brokers and the likes had an unobstructed participation in the real estate marketplace, and many of them grew on unprofessional practises & under-informing their customers.
With introduction of Real Estate Regulation & Management Act (RERA), prospective buyers now have more faith in buying the property through channel partners as they have to get themselves registered with the respective state RERA authorities under the RERA Agent category. Organised Channel partners as advisors, act as a bridge between Real Estate companies and property buyers rather than mere brokers. In Tier-2 cities like Mysore & Hubli, Channel partners, are witnessing immense growth opportunities as they have better understanding of the local requirements & trends.
Interestingly, under the RERA Act, upto 5% of the total project cost can be levied to a registered Agent (channel partners) if wrong information is shared with prospective home buyers. This has brought about transparency in the sector and has improved buyer confidence. This will inturn boost the sector and strengthen the economy further.
Channel partners are looked up as professionals who are adept with current trends & have indepth knowledge of the local markets, customer demands and the builder profiles, there by offering quality service and consultations. There role is way beyond just referring clients, to arranging for property purchase loans, property registration & finally post sales documentation.
In the current scenario, the Role of Channel partners is more that it was ever before!