Indian Real Estate Sector is expected to constitute an impressive 13 percent of the nation’s GDP by 2025. To put the numbers in perspective, India will have a $3.2020 Trillion GDP (estimated) by 2020, that’s a whopping INR 3 lakh crore or 3,00,000,00,00,000 INR without adjusting the numbers for the currency exchange rate from Dollar to INR.
But, let’s take a look at the other side of the coin, all is not good. Plagued by red-tapism and unchecked costs, a direct consequence of the absence of a unified governing body. RERA was the government’s answer to check these problems.
Let’s take a look at the potential problems:
- Overall Costs
- Window of Concession
- Pending Projects: The backlog Inventory
- Site Visits
- Liquidity Crunch
- Availability of Raw Materials
Realtors are living their worst nightmares as you read, the nightmare of no “demand”. Among all, commercial housing is hit the worst, hotels and tourism, whose sole bread was customers, lockdown for them means no revenue.
Now, the sector is looking up to the State and Center government for urgent measures in forms of capital and tweaked rules.
Desperate Times, calls for Desperate Measures
RBI has already taken the initiative with the reduction in Repo and Reverse Repo rates, grants for the NHA and more. You can read about them in detail in our blog REAL ESTATE SECTOR POSITIVE ON RBI’S REFORMS
Here are the Top 5 Expected Indian Real Estate Trends Post the Covid-19 Pandemic.
1. Reduction in Stamp Duty and Registration Costs
The stamp duty and registration charges amount to 5–8% of the property prices around India. This further escalates the cost of transactions. Proving to be a decisive factor in preventing customers form sealing the deal. Thus, a significant reduction in the rates will promote more sales
2. Single Window Mechanism for Clearances
To reduce the risk of contact spread among individuals, multiple point approval process needs to be addressed at the earliest. A single point clearance system will benefit the realtors hugely by reducing the downtime and bringing down operational expenditures.
3. Digital Real Estate
COVID-19 pandemic will change the way companies do business, real estate entities will shift towards incorporating technology in their operations, like Virtual Tours, Interactive Videos, Images, Video Conferencing, Digital Contracts.
4. Social Distance Friendly Infrastructure
Customers will focus on buying properties (Commercial and Office Spaces) which are spacious and provide sufficient area for maintaining social distancing and avoid crowding- the mantra of the day.
5. NRI Housing
The drop-in Indian Currency rates and economic slowdown has attracted a lot of foreign companies wishing to invest in real estate projects at home. Builders are expecting good traction from foreign companies in form of FDIs (Foreign Direct Investment) and JVs (Joint Venture).