2020 Real Estate revival on the cards!
The arrival of New Year is raising expectations of a new dawn. Dr. R. Kumar from Navin’s speaks about real estate sector struggling in 2019 is expected to see a revival in the New Year. There are several indicators which point to positive Turnaround in the Real Estate sector which we will discuss below.
In the year 2019 can be said to be one of the most tumultuous years in the recent history of Real Este. The sector is already in the grip of slow down for quiet few years saw further slippages in value realization, sale velocity, consumer sentiment etc. The already ailing sector was hit further hard with the ILFS crisis. This was followed by the melt down in the NBFCs, crippling fund availability for Real Estate projects. Property developers whose cash inflows were badly dented by poor consumer sentiment and continued sluggishness in offtake of units were funding the project expenditure by financial borrowings with NBFC’s also withdrawing from financing, projects were hit hard. Several projects got stalled. In the continued economic slowdown banks were already hit by huge NPAs. Thus 2019 happens to be rather painful for Residential Real Estate sector.
However there was a silver lining in Real Estate sector in 2019, in office space absorption 2019 saw significant uptake of commercial Real Estate all across the country. This could also be a forerunner for improvement in residential Real Estate sector in the New Year as more office space means more jobs likely to be created which will result in more demand for housing. Remember every 100 S.ft., in office space creates a demand for a 1000 S.ft in residential sector.
How the realty sector is poised to grow this year?
Analysis indicates the home prices are at the lowest point since 2012-13.This indicates the best opportunity for the home buyer to buy apartments at bargain prices which viewed in the perspective of adjustments for inflation, we are at the lowest prices in the last 7-8 years. Intending home buyers will start making decisions for buying homes realizing that the prices will start raising soon by which time it may be too late.
The home loan interest rates are also at one of their historic low levels which means the EMIs payable by customer for the loans received are at the lowest level in many years which is an advantage for the buyers.
PMAY Scheme is currently in operation which can further save customers above Rs.2.6lakhs. Section 80C-II also offers additional income tax deduction of upto Rs.1.5lakhs in addition to Rs.2lakhs already allowed. Both these benefits come to an end on 31.3.2020. Home buyers better rush and buy homes now before this deadline. Let’s also hope these get extended for one more year.
This present situation also offers customers with a wide variety of home buying choices due to plenty of stock availability presented by long years of slow down. Not only there are choices but many of our projects are completed/nearing completion. This offers the customers a big advantage of least waiting time to move into their dream home than ever before.
Savings on GST
When selecting ready to buy in homes- the customers also make significant savings as there is no GST for such homes.
Economic roadmap for the coming years
Hit by successive years of economic slowdown and rampant criticism from all quarters on the state of slagging economy, down sliding GDP and mounting joblessness the Government of India are bound to take up bold and progressive measures to boost the economy, 2020 will see such initiatives kick started by the government.
Already Prime Minister of India has started directly involving himself in his effort to revive the economy. Recently he has started meeting the captains of Indian country to discuss about their suggestions and views for the revival of the economy. This shows paradigm shift and Prime Minister is expected announce a slew of measures for boosting the economy.