Prominent changes in Real Estate Market in India during COVID <\/h2>\n\n\n\n![\"How](\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\")
<\/figure>\n\n\n\nThe earlier concerns of economic slowdown and uncertainties due to COVID have subsided to a great extent now. According to Livemint<\/a>, The first half of 2020 saw a 49% of the drop in sales in the top seven cities of India\u2019s realty estate, the market, however, bounced back due to some major changes in the pandemic era, especially in the domain of larger and luxurious single-family homes. Let\u2019s take a closer look at how the real estate market in India changed due to COVID\u2014<\/p>\n\n\n\nSupport from the Government of India<\/h3>\n\n\n\n
The government is offering home loan interests at record low prices, in addition to several fiscal packages, with other benchmark rates to fuel the sales in real estate. As a result, the Government of India played a major role in restoring the real estate market post lockdown. Following are some key incentives taken by the Government that helped the real estate in India to survive:<\/p>\n\n\n\n
- Tax deduction:<\/strong> The record-breaking decline in stamp duty on affordable housing plans fostered property sales. The state of Karnataka, for instance, reduced stamp duty to 3% and 2% for properties valued at INR 35L and INR 20L respectively. Maharashtra, on the other hand, reduced stamp duty to 3% across properties. Furthermore, the decline of the TDS on a property sale by 25% improved sales. The Government further also extended the dates for GST and Income Tax registration\u2014 an encouraging move for the realtors. The rate cuts in home loans, attractive offers by lenders, builder discounts, and reduction in stamp duty charges in Maharashtra and Karnataka \u2014 played majorly in favor of homebuyers planning to invest in properties.
<\/li>- Help for NBFCs and HFCs:<\/strong> The Government of India also provided generous liquidity of Rs. 30,000 crore to relieve the money in Non-Banking Financial Companies (NBFC) and Housing Finance Companies (HFC) <\/li><\/ol>\n\n\n\n
Measures were taken by the Reserve Bank of India (RBI)<\/h3>\n\n\n\n
On October 9, 2020, the RBI announced an unchanged repo rate at 4% and reverse repo rate at 3.5%, the unanimous decision has been taken until the market stabilizes. As per the latest developments made by the RBI, the risk weights on home loans<\/a> are rationalized and linked only to Loan-to-Value (LTV) ratios. This has been an encouraging motive for real estate developers<\/a> in Kolkata and the real estate market in general.<\/p>\n\n\n\nReduced Repo rate:<\/strong> RBI\u2019s initiative to reduce the Repo rate (75 bps), Reverse Repo Rate, and CRR made the process of land purchase easy. Furthermore, the reduced Reverse Repo rate of up to 3.75% also helped banks to maintain liquidity and helped builders with credit facilities. <\/p>\n\n\n\nMonetary relief:<\/strong> The impressive action undertaken by the RBI to provide an immediate subsidizing relief of Rs 1 lakh crore helped to revive the real estate market. 50,000 crore out of the relief is reserved for the National Housing Bank, Small Industries Development Bank (SIDBI), and National Bank for Rural and Agricultural Development (NABARD), the rest was further reserved as Log Term Repo Operation (LTRO). <\/p>\n\n\n\nMoreover, the RBI permitted the office of postponement of Date of Commencement of Commercial Operations (DCCO) to Non-banking Financial Companies (NBFCs). The office until now was accessible only to banking foundations. Land engineers have greatly benefited from this initiative. <\/p>\n\n\n\n
The new normal boosted Real Estate Market <\/h3>\n\n\n\n
One of the most significant driving factors fostering the demand in the housing segment homes is safety. With people spending more time at home, the affluent classes are looking for properties with amenities like rec rooms, or flex spaces, swimming pools, and home gyms. With this definite shift in end-user preference, home buyers are looking for bigger accommodations. Maximum traction is therefore visible in the ready-to-move-in homes segment within Rs. 50 lakh. Furthermore, with people working increasingly from home during the COVID, they are seeing the benefits of owning a house<\/a>, rather than rented accommodation. The new normal of owning an office space at home has also surged the demand for buying own properties among middle-income and upper-middle-income groups. The stay-at-home factor has made people appreciate and realize the value of owning a house, thus adding to the real estate business. <\/p>\n\n\n\nThe contribution of unsold inventory<\/h3>\n\n\n\n
To make up for the drop in sales in the first half of the year, real estate developers<\/a> with unsold inventory struggled with a loss on sale margins, such projects are now available with friendlier tax options and less GST. <\/p>\n\n\n\nTo maintain cash flow and liquidity, realtors refrained from investing in any new property launches. Instead, their focus remained on completing ongoing projects and releasing most of their unsold inventory. For this, realtors either kept the pricing slab of properties stable or offered discounted rates to release the severe liquidity stress. <\/p>\n\n\n\n
According to a market survey conducted by international property consultant JLL<\/a>, Kolkata has the largest unsold inventories, especially due to COVID-19, despite which the market size ranks at number three after Bengaluru and Pune.<\/p>\n\n\n\nThe change in technology<\/h3>\n\n\n\n
The COVID-19 pandemic accelerated the trend of digitization in real estate to boost efficiency and to guarantee an enhanced customer experience. The state of Kolkata recently introduced an e-registration platform for property documents considering the urgency of property registration during the lockdown in real estate Kolkata. Through the online process, homebuyers can now pay stamp duty, verify documents, and register from the comfort of home. The move has also opened revenue channels for real estate Kolkata and for the State Government that faced a paucity of cash due to lockdown. <\/p>\n\n\n\n
Furthermore, real estate developers in Kolkata said the move helped them to register sale agreements for deals that were concluded before the lockdown. The online platform also helped to gain cash inflow from customers through the online platform. The online access came in handy for real estate companies in Kolkata who had finished the projects but were unable to hand over the property to buyers despite the completion certificate. <\/p>\n\n\n\n
Kolkata an upcoming real estate sector<\/h2>\n\n\n\n<\/figure>\n\n\n\nReal estate in Kolkata has become a preferred choice for IT corporations such as Cognizant, Infosys, TCS and Wipro, among others. The city is also becoming a preferred alternative for start-ups, thus contributing to the rise in Kolkata\u2019s economy. This change is followed by major infrastructural developments in the city such as East-West Metro, and proposed government projects such as SEZ in New Town, and adding to the market value of the city.\u00a0<\/p>\n\n\n\n
With other major metro cities experiencing market saturation, upcoming cities like Kolkata have all the indicators of becoming a market favorite. Joka<\/a> and New Town<\/a> in Kolkata are among the top residential areas having the maximum number of property launches. Furthermore, real estate developers are investing in low-inflated states like Kolkata, owing to the fluctuating equity markets. This makes Kolkata a smart investment option during the pandemic period. <\/p>\n\n\n\nFurthermore, the Central Government along with the State Government of West Bengal has launched subsided plans like PMAY Scheme and Nijashree Scheme. Such schemes are opening doors to affordable homes.<\/p>\n\n\n\n
In closing<\/h2>\n\n\n\n
Real estate is considered a safe investment option and the field continues to dominate investors\u2019 preference. This traditional trend of investment in the real estate market is anticipated to pick up the pace with political, and economic stability and with rapid urbanization in 2021. Real estate experts also predict a significant shift in commercial and retail spaces investment in 2021. Positive traction is anticipated in the leasing of co-working spaces. The demand in this segment is expected to increase with global companies becoming more open to flexible working conditions. <\/p>\n\n\n\n
Furthermore, prospects of commercial real estate<\/a> are conducive in 2021. Contributors to this trend are mainly\u2014 restored consumer confidence, re-opening of workplaces, favorable policy landscape, and substantial interest from international investors. Furthermore, consumers are likely to rely upon organized developers with sound credentials, given the overall hygiene and wellness concerns that ensued from the pandemic. <\/p>\n\n\n\nYou can also refer to our blogs “Why is investing in Real Estate Kolkata during COVID is smart?<\/a>” and “How GST Rate on Real Estate impact homebuyers post COVID?<\/a>“<\/p>\n\n\n\nWhat is the future of the real estate market in India?<\/strong><\/strong> The real estate market in India is leveraging IoT and AI to invest in the niche segment of smart homes, given the increasing demand and better resale value in the segment. Real Estate in India has undergone a transition in the past couple of years and the industry is anticipated to embrace a conducive combination of technology and innovative marketing strategies, thus bringing about a new wave of efficiency. With consumer confidence increasing in the real estate market in India, there is also scope for lucrative investment opportunities.\u00a0<\/p> <\/div>
![\"How](\"https:\/\/psgroup.in\/blog\/wp-content\/uploads\/2021\/02\/pexels-photo-323780.jpeg\")
<\/figure>\n\n\n\nThe earlier concerns of economic slowdown and uncertainties due to COVID have subsided to a great extent now. According to Livemint<\/a>, The first half of 2020 saw a 49% of the drop in sales in the top seven cities of India\u2019s realty estate, the market, however, bounced back due to some major changes in the pandemic era, especially in the domain of larger and luxurious single-family homes. Let\u2019s take a closer look at how the real estate market in India changed due to COVID\u2014<\/p>\n\n\n\n The government is offering home loan interests at record low prices, in addition to several fiscal packages, with other benchmark rates to fuel the sales in real estate. As a result, the Government of India played a major role in restoring the real estate market post lockdown. Following are some key incentives taken by the Government that helped the real estate in India to survive:<\/p>\n\n\n\n On October 9, 2020, the RBI announced an unchanged repo rate at 4% and reverse repo rate at 3.5%, the unanimous decision has been taken until the market stabilizes. As per the latest developments made by the RBI, the risk weights on home loans<\/a> are rationalized and linked only to Loan-to-Value (LTV) ratios. This has been an encouraging motive for real estate developers<\/a> in Kolkata and the real estate market in general.<\/p>\n\n\n\n Reduced Repo rate:<\/strong> RBI\u2019s initiative to reduce the Repo rate (75 bps), Reverse Repo Rate, and CRR made the process of land purchase easy. Furthermore, the reduced Reverse Repo rate of up to 3.75% also helped banks to maintain liquidity and helped builders with credit facilities. <\/p>\n\n\n\n Monetary relief:<\/strong> The impressive action undertaken by the RBI to provide an immediate subsidizing relief of Rs 1 lakh crore helped to revive the real estate market. 50,000 crore out of the relief is reserved for the National Housing Bank, Small Industries Development Bank (SIDBI), and National Bank for Rural and Agricultural Development (NABARD), the rest was further reserved as Log Term Repo Operation (LTRO). <\/p>\n\n\n\n Moreover, the RBI permitted the office of postponement of Date of Commencement of Commercial Operations (DCCO) to Non-banking Financial Companies (NBFCs). The office until now was accessible only to banking foundations. Land engineers have greatly benefited from this initiative. <\/p>\n\n\n\n One of the most significant driving factors fostering the demand in the housing segment homes is safety. With people spending more time at home, the affluent classes are looking for properties with amenities like rec rooms, or flex spaces, swimming pools, and home gyms. With this definite shift in end-user preference, home buyers are looking for bigger accommodations. Maximum traction is therefore visible in the ready-to-move-in homes segment within Rs. 50 lakh. Furthermore, with people working increasingly from home during the COVID, they are seeing the benefits of owning a house<\/a>, rather than rented accommodation. The new normal of owning an office space at home has also surged the demand for buying own properties among middle-income and upper-middle-income groups. The stay-at-home factor has made people appreciate and realize the value of owning a house, thus adding to the real estate business. <\/p>\n\n\n\n To make up for the drop in sales in the first half of the year, real estate developers<\/a> with unsold inventory struggled with a loss on sale margins, such projects are now available with friendlier tax options and less GST. <\/p>\n\n\n\n To maintain cash flow and liquidity, realtors refrained from investing in any new property launches. Instead, their focus remained on completing ongoing projects and releasing most of their unsold inventory. For this, realtors either kept the pricing slab of properties stable or offered discounted rates to release the severe liquidity stress. <\/p>\n\n\n\n According to a market survey conducted by international property consultant JLL<\/a>, Kolkata has the largest unsold inventories, especially due to COVID-19, despite which the market size ranks at number three after Bengaluru and Pune.<\/p>\n\n\n\n The COVID-19 pandemic accelerated the trend of digitization in real estate to boost efficiency and to guarantee an enhanced customer experience. The state of Kolkata recently introduced an e-registration platform for property documents considering the urgency of property registration during the lockdown in real estate Kolkata. Through the online process, homebuyers can now pay stamp duty, verify documents, and register from the comfort of home. The move has also opened revenue channels for real estate Kolkata and for the State Government that faced a paucity of cash due to lockdown. <\/p>\n\n\n\n Furthermore, real estate developers in Kolkata said the move helped them to register sale agreements for deals that were concluded before the lockdown. The online platform also helped to gain cash inflow from customers through the online platform. The online access came in handy for real estate companies in Kolkata who had finished the projects but were unable to hand over the property to buyers despite the completion certificate. <\/p>\n\n\n\n Real estate in Kolkata has become a preferred choice for IT corporations such as Cognizant, Infosys, TCS and Wipro, among others. The city is also becoming a preferred alternative for start-ups, thus contributing to the rise in Kolkata\u2019s economy. This change is followed by major infrastructural developments in the city such as East-West Metro, and proposed government projects such as SEZ in New Town, and adding to the market value of the city.\u00a0<\/p>\n\n\n\n With other major metro cities experiencing market saturation, upcoming cities like Kolkata have all the indicators of becoming a market favorite. Joka<\/a> and New Town<\/a> in Kolkata are among the top residential areas having the maximum number of property launches. Furthermore, real estate developers are investing in low-inflated states like Kolkata, owing to the fluctuating equity markets. This makes Kolkata a smart investment option during the pandemic period. <\/p>\n\n\n\n Furthermore, the Central Government along with the State Government of West Bengal has launched subsided plans like PMAY Scheme and Nijashree Scheme. Such schemes are opening doors to affordable homes.<\/p>\n\n\n\n Real estate is considered a safe investment option and the field continues to dominate investors\u2019 preference. This traditional trend of investment in the real estate market is anticipated to pick up the pace with political, and economic stability and with rapid urbanization in 2021. Real estate experts also predict a significant shift in commercial and retail spaces investment in 2021. Positive traction is anticipated in the leasing of co-working spaces. The demand in this segment is expected to increase with global companies becoming more open to flexible working conditions. <\/p>\n\n\n\n Furthermore, prospects of commercial real estate<\/a> are conducive in 2021. Contributors to this trend are mainly\u2014 restored consumer confidence, re-opening of workplaces, favorable policy landscape, and substantial interest from international investors. Furthermore, consumers are likely to rely upon organized developers with sound credentials, given the overall hygiene and wellness concerns that ensued from the pandemic. <\/p>\n\n\n\n You can also refer to our blogs “Why is investing in Real Estate Kolkata during COVID is smart?<\/a>” and “How GST Rate on Real Estate impact homebuyers post COVID?<\/a>“<\/p>\n\n\n\n The real estate market in India is leveraging IoT and AI to invest in the niche segment of smart homes, given the increasing demand and better resale value in the segment. Real Estate in India has undergone a transition in the past couple of years and the industry is anticipated to embrace a conducive combination of technology and innovative marketing strategies, thus bringing about a new wave of efficiency. With consumer confidence increasing in the real estate market in India, there is also scope for lucrative investment opportunities.\u00a0<\/p> <\/div> Support from the Government of India<\/h3>\n\n\n\n
<\/li>Measures were taken by the Reserve Bank of India (RBI)<\/h3>\n\n\n\n
The new normal boosted Real Estate Market <\/h3>\n\n\n\n
The contribution of unsold inventory<\/h3>\n\n\n\n
The change in technology<\/h3>\n\n\n\n
Kolkata an upcoming real estate sector<\/h2>\n\n\n\n
![\"How](\"https:\/\/psgroup.in\/blog\/wp-content\/uploads\/2021\/02\/pexels-photo-681368-1024x575.jpeg\")
<\/figure>\n\n\n\nIn closing<\/h2>\n\n\n\n