Indian Real Estate sees a K-shaped recovery path in 2021
The onset of the coronavirus led to a decline in sales in real estate over the past year and a half. However, as the world reemerges out of the pandemic, economies and industries across the globe are seeing a resurgence in growth. Fortunately, this includes Indian Real estate as well. As per the latest data on March quarter performance from several real estate research houses, the Indian Real Estate industry is inching towards a K-shaped growth pattern post the second wave of COVID-19 in India.
What is this K-shaped growth?
Over the course of the pandemic, both residential and commercial real estate witnessed a drastic downfall in sales. However, in the March quarter of this year, residential real estate sales saw an uptick and climbed upwards. On the other hand, commercial real estate, like office spaces, stopped lower on the graph as sales steadily declined. This has caused a K-shaped outcome of the graph of the March Quarter.
Why is Indian real estate showing K-shaped growth?
There are numerous reasons why residential property sales are burgeoning while commercial property sales are plummeting. Some of the top factors contributing to this K-shaped growth include:
- Rise of ‘Work From Home’ culture : One of the biggest shifts caused by coronavirus was merging home and office space. As more corporations began working from home for extended periods of time, the need for commercial real estate has diminished. Therefore sales of commercial properties like office spaces have dipped.
- Low prices made homes affordable : The downfall of real estate the past year made builders want to bounce back stronger than before. Thus, in order to give an impetus to sales and sell inventories quickly, developers across the nation lowered their prices. especially in the affordable housing segment between Rs. 40 to Rs. 80 lakhs. Thereby, homes got affordable for home buyers and residential property became an attractive investment again.
- Offers made it easy to purchase property : In order to give the Indian real estate industry a much-needed boost, several states like Maharashtra and Karnataka lowered Stamp Duty and provided other relief to home buyers. These, coupled with lowered prices and festival offers presented home buyers with a chance they could not pass on. As a result, real estate sales soared in March 2021 Quarter.
- The need to #StayHomeStaySafe : The pandemic has affected and altered our lifestyle. After a year of it, we are now used to being at home more. We do not step not only because that would be unsafe but also because most establishments outside are closed. Hence, commercial outlets like malls, shops, co-working spaces and restaurants are performing poorly with no new ventures starting out. This has been another blow to commercial real estate and caused a fall in demand for real estate for commercial purposes.
As per PropertyPistol.com‘s predictions, while this K-shaped growth is part of our current circumstances, as we gear up to reopen the world and go back to the old ways of normality, the growing rift between commercial and residential real estate sales will minimize overtime.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
