Like other industries, the Indian realty sector too faced a major hurdle during the lockdown. Property sales dipped quite low, resulting in a lack of lack of cash inflows for the developers. Compared to the first Quarter of 2020 when 45,200 property sales were recorded, the second quarter witnessed only around 12,730 units being sold. Evidently this is a sign of sharp decline in the demand for properties.
However, the developers are now relieved that the property sales are starting to pick up pace again. The third quarter of 2020, from July to September saw 29,520 property sales. Property launches have shown a similar trend too. The number of new launches in the second quarter in the top seven cities of 2020 was 1390, which is surprisingly low. This was primarily because construction activities were stopped in the initial phases of the lockdown. Even when it was allowed again, it took some time to resume construction again in most of the sites. However, the number of new launches in these cities jumped to 32520 in the third quarter of the year. Most of these properties were launched in Pune, Mumbai and Gurgaon.
A number of trends are noticeable in the real estate sector along with the revival of sales. While a large section of the property buyers in the pre-COVID times used to be investors, now the demand for homes among end-users is rising too. This is because the work-from-home trend, along with the various health hazards during the pandemic has led people to realise the benefits of owning a home rather than renting one.
Right now, property prices have fallen sharply and interest rates are very low. Moreover, the government and the realty developers are coming up with various offers and deals. In Pune and Mumbai, the homebuyers can enjoy benefits on stamp duty charges. The Pradhan Mantri Awas Yojana (PMAY) aims to create affordable housing in the urban areas, often by teaming up with reputed developers. This makes it a good time to buy properties, which is expected to facilitate the revival of the real estate sector.
Let’s have a look at the major schemes that have boosted real estate sales.
- PYP scheme: The PYP scheme in Gurgaon allows property owners to exchange their old properties which are stuck for new premium ones by leading developers. PYP stands for Port Your Property scheme. Homeowners who are interested to exchange or upgrade their present properties can opt for this scheme.
- Lucrative deals by developers- Leading developers are offering exciting deals for attracting home buyers. Buyers have to pay just 10 percent of the amount for booking a property and pay the remaining on possession which reduces the blocked amount for buyers and investors considerably.
- High Rental income- Developers are offering high rental returns of 30 percent which offer a high return on investment for investors.
- Longer leaser for commercial projects- Investors in commercial property can now enjoy a longer lease on commercial property for 9 years. This is a great incentive for investors.
- PMAY: The Pradhan Mantri Awas Yojana offers subsidies on the interest paid for acquired home loans for first-time property buyers. Evidently, new homeowners can enjoy low amount of EMIs when they purchase these properties.
- Low Stamp Duty: The government has exempted the stamp duty completely or partially, by virtue of certain schemes. This is applicable in some of the metro cities in India. In the process, homeowners can manage their funds better, and eventually make significant savings. The Maharashtra government has cut down the stamp duty on purchase of new houses by 3 percent from Sept 1 – Dec 31, 2020 in order to boost real estate property sales.
- DDA Housing Scheme: This housing scheme, launched by the Delhi Development Authority, reserves properties for sections that are economically weak. It is connected to the PMAY.
Apart from this, one can obtain home loans at reasonable rates of interests from banks. Converting the amount to EMIs, you can easily manage the payments. No wonder, real estate buyers are enjoying several benefits while making an investment.