NEW DELHI: After being impacted by regulatory norms and low demand for years, India's real estate sector witnessed some positive action in 2021. Backed by low interest rates, stamp duty cuts by state governments and a need to switch to bigger homes, housing sales staged a V-shaped recovery even as the overall economy is yet to recover fully from the woes of COVID-19.
According to Anuj Puri, chairman of real estate consultancy firm ANAROCK, new launches in 2021 are likely to increase by at least over 70 per cent across the 7 top cities while average sales growth could be above at least 50-60 per cent in 2021 as against 2020. Housing sales during the January-September period of 2021 across the top seven cities were up by 5 per cent than the whole of 2020.
"As of now, we think both sales and new launches may inch closer towards 2019-levels and demand will remain steady and be driven primarily by end-users, so there won’t be any unnatural speculative spikes," Puri told The New Indian Express.
He added that hardening interest rates may play a factor in overall demand in 2022 (most likely the second half), but the new pandemic-infused desire for home ownership will remain strong throughout the year. The other worrying factor for the industry is continuous increase in prices of raw materials which is expected to push property prices by 5-10 per cent next year.
"Prices will firm up owing to the rising input costs as at some point developers will have to stop absorbing further increase in input costs," said Rajat Rastogi, Executive Director of Mumbai-based developer Runwal Group.
He added that keeping aside the threat posed by the new variant, the real estate sector should see a great 2022. The industry also expects ultra-high net-worth individuals and NRIs to continue with their investment.
"The residential real estate market in India has become more lucrative for UHNIs and NRIs as a result of the increased transparency and ease in investment norms. With RERA ensuring transparency and laws allowing 100 per cent FDI in construction, Indian real estate is witnessing sharp investment infusions from NRIs," said Shraddha Kedia-Agarwal, Director of Transcon Developers.