India Q1 GDP and Impact on Real Estate
Ramesh Nair, CEO, India & Managing Director, Market Development, Asia at Colliers shares his perspective on April-June quarter (Q1) GDP and impact on real estate.
India’s GDP in the April-June 2021 quarter rose 20.1%, led by a low base effect last year due to the pandemic-led national lockdown in 2020. While the country witnessed a devastating second wave during the April-June quarter, the lockdowns were more localized, which meant that economic activity did not come to a standstill. The current numbers signals that the Indian economy is on its way to recovery after last year.
During the quarter, construction activity rose 68.3 % showing signs of recovery. The construction sector saw the highest growth amongst all the sectors, during the quarter. However, this is against the April-June 2020 quarter wherein construction activity fell about 50% due to stringent lockdown measures which led to construction workers moving back to their hometowns.
We believe that growth in the construction sector will be led by sustained demand in the residential sector helped by increased affordability of residential properties. Moreover, the ongoing vaccination drive is being held at a fast pace, and will help in infusing optimism in the market. We expect a rebound in construction activity in next two quarters, but it could still remain below pre-covid levels, amidst uncertainty of third wave.