Housing demand in India at all time high
Commercial space absorption will see 10-15% fall due to work from home practice, says NAREDCO
New Delhi: Residential real estate demand in India is at all-time high, thanks to favourable factors such as low interest rates, change in consumer preferences and reduced stamp duty in Maharashtra. Post lockdown in India, consumers likings have shifted towards bigger houses which led to surge in residential real estate demand.
Niranjan Hiranandani, President, National Real Estate Development Council (NAREDCO), on Monday, expressed his gratitude on the overwhelming support the real estate industry has received from different quarters post lockdown.
"Covid period found a positive outlook for the developers, especially those who had stocks (house) with them which were ready or close to ready. So, there were several benefits for a house buyer. If you had an occupation certificate, you didn't have to pay GST, so you saved 5 per cent." Hirandani said while addressing a panel of industry experts on a real-estate webinar organised by NAREDCO.
"If you were in Maharashtra, you saved 3 per cent (reduced stamp duty) and there has been a reduction in the rate of flats or the prices have remained consistent despite inflationary tendencies which have taken place," he added.
On commercial space, Hiranandani reiterated that work from home is going to exist in the coming years. The commercial real estate will witness a reduction of 10-15 per cent due to work from home. NAREDCO is also planning to introduce a rating system for the associated developers.
"My estimate is that the demand in terms of commercial space post Diwali 2021 is also going to see an aggressive change. Even in our company we are betting on an aggressive commercial market too along with the residential market and we are hoping that this will work out very quickly. Post June-July 2021, we think that the people will be back into their offices after vaccinations," he added. Renu Sud Karnad, Managing Director, HDFC Ltd., speaking on the occasion said, "There is a huge opportunity we all are sitting at. Interest rates are the lowest today and State Bank of India has announced even lower rates, making us aware that interest rate after some time is slowly going to go up. Developers have been sensible about the pricing and government initiatives, most importantly, such as the reduction of stamp duty has played an important role. My real concern is interest rates shouldn't go up."
She also warned - Developers should not get carried away with the current pricings as the confidence in real estate is slowly picking up in the market and the fear of ongoing projects remaining incomplete is also a possibility. She further said that the real estate bodies such as NAREDCO, needs to push state government across the country to provide greater incentives to developers like that of the state government of Maharashtra.