Path to recovery: Reform, Transform, Perform
Manju Yagnik, vice chairperson, Nahar Group, and VP, NAREDCO (Maharashtra), on how smart homes will be popular going forward
Since time immemorial, land has played an important role in shaping the course of history. Great wars were fought; kingdoms were created – all in the quest for land. The reality here is that – land never loses value or demand, and with only limited space available for a fast-increasing population, realty offers better (and guaranteed) returns compared to other popular investment choices. The unprecedented disruptions caused by the on-going pandemic stalled the economy in Q2 2020 however as lockdown is uplifting, there is sharp curiosity being witnessed amongst buyers.
A full-fledged recovery for the real estate sector will help boost chances of a broader recovery for the economy. Government and regulatory intervention along with pent up demand will help the sector and in turn over 250 allied sectors to attain the $5 trillion GDP target set by the government by 2024. The registration data for the month of April till June in Maharashtra shows a steady enquiries and closures while we will have to wait for more indicators for a forecast on full blown recovery.
Buyers will go in for smart homes and integrated townships in post-COVID-19 world
People have realized the importance of owning a home during this pandemic. With the government announcing slew of measures, most noted was the cut in stamp duty by 1% for areas in MMR, few parts of Maharashtra and RBI slashing key rates by 250 bps to bring it down to a record low, we are likely to see an increase in the first time homebuyers, moving towards investing into a home so end user market will pick up. On the other hand, credit linked subsidy scheme under PMAY has led to increased buyer interest in the affordable and lower-mid segment. A cut in repo rate is a direct stimulus for homebuyers.
Going further, lending rates will help boost demand as well. There is no doubt that it is the most beneficial time for investors in real estate due to factors such as the fall in Indian rupee, subdued property prices, reduced stamp duty in most states and unchanged ready reckoner rates in many markets.
The considerable number of enquiries especially from Gulf countries, followed by the United states and other European countries brings hope for the sector to bounce back and emerge stronger. Even after having spent a significant part of their work life in these countries, citizenship is not an option available to the Indians based in the Gulf region, which brings them back to India when it comes to investing in assets like a house.
Predominantly, UAE, USA, UK, and Canada are the biggest source of NRI investment in India, with 42% of the total inflow coming from GCC alone. As per the Ministry of External affairs, nearly 8.9 out of 12 + million Indians living abroad are based in West Asia alone, of which there are 3.3 million in the United Arab Emirates, 2.6 million in Saudi Arabia and 2.9 million in Kuwait, Oman, Qatar and Bahrain. GCC contributes close to $40 billion annually as international remittance to India.
The stage at which real estate sector is includes reform, transform, perform and for that, we as responsible developers have acknowledged the changing preferences of the homebuyers, and are anticipating developmental and structural transformation in design.
From being a concept, the word smart has gradually evolved. Consumers now have access to intuitive technologies and virtual assistants which can remind them about daily chores, plan their day and operate their appliances. Therefore, automated homes and wi-fi access streets are going to see a bright rise. The Indian smart home market is expected to be around $6 billion by 2022, a two-fold increase from $3 billion estimated in 2020. Globally, that number is expected to reach $53.45 billion by 2022. Going forward homes with carved out office spaces, and with wellness as a part of it will become big attractions. The future will depend on continuing policy support and economic stabilization.