Real estate demand picks up to pre-Covid level

New Delhi: After it was badly battered by pandemic-led lockdowns, the ease in restrictions and subsequent economic recovery has boosted the volumes of the domestic real estate sector, say industry insiders and analysts. The trend is expected to continue during the upcoming year, they say, adding that the sector's current volumes have almost reached the pre-Covid levels.

"The factors that have supported strong recovery in demand are expected to remain in place for the near to medium term as well, including increasing preference for own homes as against renting, higher demand for larger homes with better amenities, as well as, improved affordability," ICRA Vice President Mathew Kurian Eranat said.

"Thus, the demand trends are expected to sustain going ahead into 2022 as well with developers lining up new project launches to meet the demand."

IIFL Finance's Head of Real Estate Business, Pranav Dholakia said: "Residential real estate space has seen an uptick over the last few months largely driven by increase in economic activity post the second wave."

"A sizable pent-up demand for quality homes, better affordability due to soft interest rates and supportive government policies have created a conducive environment." However, a rise in input costs for construction materials has become a major headache for the sector.

"A point of concern this year was that because of the inflation, construction costs have skyrocketed," Mantra Properties CEO Rohit Gupta said. In the past one year, the Nifty Realty index rose 77 per cent to 507 points. Index value typically provides an indication about the market sentiment.

"Real estate demand is improving since the start of the opening of the economy and the festive season supported by factors like lower interest rates, tax relaxation for first time buyers under 'PMAY' (Pradhan Mantri Awas Yojana ) and stamp duty cut," Choice Broking Research Analyst Ankit Pareek said. "We are positive on the real estate sector and expect demand to improve in coming years with the government's focus on Infrastructure development."