Jan 2021 , by , in ARTICLE, FEATURES, News/Views


By: Sapna Srivastava 

In an industry that is always evolving, the global pandemic has spurred us on to be more agile, more creative and more inventive than before. Even as a vaccine for COVID-19 appears to be on the horizon, the definition of “Normal” seems to have been altered forever. Certain aspects of social distancing and work from home will continue to re-define our real estate developments and urban planning for years to come.

Developers have resorted to digital outreach programmes to ensure that they stay connected with the customers. The new normal routine has urged redesigning of home layouts to encompass work\ study\ wellness and promote walk to work culture. And it has become clear that affordable housing segment, will bounce back faster than expected.

The pandemic induced lockdowns brought construction to a grinding halt. The reverse migration of labourers worsened the situation. Cash flows were severely impacted with sales coming to an almost dead end. Commercial real estate in a state of flux stares at rising vacancies, as work-from-home (WFH) picked up and companies began exploring a long-term strategy around it.

Government has come up with plenty of fiscal measures to deal with the liquidity and funding issues for real estate. The steps announced by the government and RBI to mitigate the COVID-19 impact have been successful in boosting property demand in the short term, but fail in addressing the prolonged problems of the sector that could ensure a long term growth roadmap.

The liquidity infusion and enhanced low cost credit measures definitely addressed the supply side of the economy, but the consumer spend would need demand impetus. To enhance the disposable income in hands of consumers for inducing spends, pushed authorities to slash interest rates to its historic low, NO GST post OC received, slashed stamp duty at the state level, extension of credit guarantee scheme, advanced outlays of PMAY-U, and also thrust on affordable rental housing.


The recalibrated unlocking of economy under ‘Mission Reopen’ gained momentum with economic activities springing back under the new normal situation The liquidity measures introduced by RBI and Union Finance minister injected liquidity into the market for it to recuperate quickly.

They announced relief measures to aid businesses sail through these challenging times be it the loan moratorium, lowering of repo rate resulting in lower interest rates for home loans, approval of projects of Rs 12,079 crores under SWAMIH fund and so on. The one time loan recast has kept almost 95% of the developers out of its ambit due to Standard Account criteria while ECLGS Scheme and increase of safe harbor limit from 10% to 20% in the circle rate and selling price are welcome steps.  There are indicators that point towards recovery in the sector, at a less than desired pace.

The real estate sector touched the lowest of lows during the severe nationwide lockdown. While construction activities came to a sudden halt, reverse migration of labourers has made the resumption of work difficult. Developers face severe liquidity constraints. Home sales and new property launches suffered a great deal as the nation struggled to battle the pandemic. 


Considering the vaccine is still some time away, buyers will continue to see value in upgrading to homes with large spaces and within self-sustained communities. Destinations like Goa, Dehradun, Alibaug are now becoming an all-year home havens with their easy connectivity and favourable weather conditions.

The need of owned homes was underpinned in a pandemic crisis on grounds of comfort, convenience and community living. The demand for efficient layouts with extra flexi space and luxury homes to upgrade the lifestyle topped the homebuyer’s wish list. In a significant trend seen during Covid-19, buyers prefer ready-to-move-in (RTMI) homes and affordable and mid-segment properties.

The remote work culture, geo-political uncertainties, currency depreciation and values of other investment assets went under sharp volatility, real estate as a safe bet investment highly attracted NRI communities across the globe to invest in safe nest back home. Gradually there is a change in home buyer profile with female buyers and renters opting to buy their first home as the largest segment of home buyers in FY 20-21.

The renewed commercial spaces would need to adhere to the social distancing norms and need large office floor plates to accommodate the workforce. Also, decentralizing office space for business continuity plans will augur the demand for co-working spaces, flexi space, and business centre in proximity at the peripheral locations.

As there is a major shift towards digitization due to the pandemic; people who favour offline property search now prefer online real estate portals to search properties. Online sales has begun to gain traction and leading developers will and there has also been a huge demand for virtual tours wherein buyers are opting the same either to shortlist or to finalize their homes.

Another major change will be enhanced importance to sustainable development. Green real estate development is the future. So, recycling of water and waste, rain water harvesting, control over carbon emissions, green spaces and solar as also renewable power generation alternatives will be the watch-words through end-2020 into 2021.

There is a renewed demand for home automation and technology driven amenities on the drawing board of developers to fuel the growing demand of new age homebuyers. Similarly, the pandemic has resulted in sanitation and hygiene gaining in importance, as has better ventilation and natural light and amenities like uninterrupted power supply, fiber-optic connectivity for robust Internet connectivity etc. 

Indian economy has proved to be resilient and the real estate recovery has been faster than expected. There are already high hopes from the coming year. 


It was a tough year for the real estate sector due to the COVID-19 pandemic. The home sales were down 54 percent during the January to September period this year as compared with the corresponding period in 2019.

Six months into the situation, real estate demand has piqued with genuine homebuyers willing to take advantage of value propositions coupled with payment plans given by a vast set of developers. Sales started to recover from October onwards on account of pent up demand as well as a seasonal upswing in demand because of the festival season. In fact, sales were higher in October and November on a year-on-year basis in some cities like Mumbai and Pune, driven by stamp duty cuts, low interest rates, stagnant housing prices and attractive offers by developers. Most cities achieved up to 70-80% of pre COVID business levels with leading developers clocking a 100% recovery by October 2020.

Commercial office absorption is picking up across the top six Indian cities, with Q3 2020 gross absorption at 6.5 million square feet (msf), up 58% QOQ. The rise in leasing activity signals that occupiers are returning to the drawing board to close ongoing deals that were stalled earlier.


The pandemic induced total economic lockdown brought Indian economy to grind halt, wherein Indian real estate was badly affected. However, with a series of economic and policy reforms introduced by the central government, India saw in the last quarter of FY 19-20 a positive recovery trend.


Satish Magar, President, CREDAI National agreed that the real estate in India had been facing headwinds  from  past few years and the situation became tougher owing  to the COVID-19 situation. “The global economic slowdown had a negative impact on real estate demand in the country this year. Construction activities were brought to a sudden halt in the first quarter (Apr – Jun) due to the COVID 19 induced lockdown and the uncertainty over jobs and livelihoods robbed the market of its potential buyer-base leading to near zero demand. Post lockdown sales trajectory gives some hope, but is yet to touch pre covid levels in most cities across the country.”


Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd summarizing the year gone by shared, “The journey of the Indian real estate industry in the year 2020 will be remembered for its profound structural and radical impact on the business as a whole. From a gruelling economic slowdown to an unbidden pandemic, Covid-19, the year brought about inimitable changes to the way we live, work and shop. Urbanisation came to a halt and reverse migration took place. Living spaces were redefined and work from home got a leg up. Homes became more than dwelling spaces; Second homes became primary for many. As the lockdown eased and the pandemic lost some of its initial stings, residential buyers returned to the market, demanding more space, better designs and greater connectivity in every sense. Also, buyers wanted to buy from builders who were financially sound and credible. There is a definite urgency among customers to upgrade their living standards, owing to the changing work-life conditions. This has resulted in a faster pick-up of ready to-move-in inventory of affordable luxury and premium luxury segments. Owing to the unlock India efforts by the government and various stimuli announced for customers, the second quarter of FY21 had been robust for realty.”

This year, the Government announced several measures to infuse liquidity and provide incentives to boost the economy and the real estate sector. One of the key measure was reduction of repo rates which brought home loan rates to below 7%, for the first time in close to two decades. The effects of these measures were felt in the months starting July.

Sankey Prasad, Chairman & Managing Director at Colliers International India on an optimistic note stated, “During 2020, the government has initiated several reforms towards the real estate sector aiding both the demand and the supply side. Affordable housing will continue to gain traction led by the extension on interest of affordable housing loans, as well as the renewed rigour of the Pradhan Mantri Awas Yojana.”

Shishir Baijal, Chairman and Managing Director, Knight Frank India added, “The residential market is attempting to stand again on its feet after a spate of structural readjustments of previous 2-3 years. Then came the COVID-19 pandemic and associated lockdown – amongst the most stringent in India – which brought business activity to a complete standstill. In the second half of 2020, as we saw gradual lifting of the lockdowns and increased awareness about responsible handling of the coronavirus threat, consumers, particularly in the housing segment, have comeback with a renewed vigor. Time bound and focused government interventions also served as a catalyst to rekindle the market sentiment. We are also warming up to a new year with commercial real estate segments of office, warehousing, and retail on a healthy growth trajectory.”

The Year 2020 was a year of survival and unpredictability. The pandemic-induced lockdown had gripped the world resulting in a crisis. There was opportunity in this adversity, especially for tangible assets like real estate. With uncertainty all around, investors, small and big, sought to park their money in safe-haven investments like Gold and Real estate. Also, fence sitters took the plunge as everyone realized the value of owning a good home. Things have been looking bright for residential home sales as Government incentives like low home loan rates and slashing of stamp duty have posed as catalysts.


The events of 2020 have already shaped the years to come; at least 2021 and 2022 in terms of real estate demand, sales trends, and overall industry practices. The consolidation will gather momentum in 2021, helping the industry gain customer confidence by way of timely deliveries and quality products.

J.C. Sharma, Vice Chairman & Managing Director, SOBHA Limited feels the year 2020 has tested world’s resilience. “It is notable that COVID 19 has impacted the realty sector in myriad ways. During these stressful times, customer experience has emerged as one of the most important trends in our business. Almost overnight, physical distancing and contactless interaction has become critical. People are demanding higher safety standards and are concerned about their productivity, efficiency, and connectedness with the world outside from the confines of their home. Creating digitally enabled business models have suddenly become the norm.. The future of real estate will depend on the integration of high-grade efficient delivery of personal mobility, housekeeping, wellness and catering to our customer needs and expectations and the experiences that we can create and offer. The more we tailor make our offerings and address issues of concern; more relevant we shall become.”

Indeed this has been the year of evolution of real estate as the preferred investment class. “It may seem like a paradox, but the pandemic has catalysed housing demand rather than suppressing it. Home buyers have understood the important role that homes play in ensuring their wellbeing, as well as their physical and emotional security. The role of technology expanded in real estate with developers leveraging 3D walkthroughs and Virtual Reality to improve customer experience, sustain the momentum of sales digitally while additionally focusing on improving construction methodologies.

The future of the real estate industry would witness consolidations and JV’s and JD’s as a new trend. The process is separation of grain from the chaff, and branded developers with proven track record and financial stability will sustain – it will be survival of fittest, to put it simply. 

Ashwin Chadha, President, India Sotheby’s International Realty highlighting the trends among UHNIs and HNIs shared, “There is a spike in demand for larger homes in the city’s most coveted addresses like Lutyen’s Delhi, Judges Court Road in Kolkata, Malabar Hills, Juhu and Bandra in Mumbai. Holiday homes in destinations like Goa, Rishikesh, Dehradun and Alibaug are in great demand, becoming primary homes for many families in the new norm of work from anywhere (WFA). In condos and apartments, the luxury home buyer has picked up ready-to-move-in spacious units that offer extra room for recreational and fitness-based activities, and open spaces like gardens, terraces, and balconies. Sales have accelerated in the INR 5 crore plus segment over the last six months, given the attractive pricing for ready-to-move in inventory, low mortgage rates and stamp duty cuts in states like Maharashtra.”

Pradeep Aggarwal, Co-founder & Chairman, Signature Global and Chairman, National Council on Affordable Housing, ASSOCHAM elaborated on the realty sector’s paradigm changes, “The year 2020 was the year for real estate when it used all the digital tools, innovative schemes, and lucrative offers to help people realize the importance of a real estate asset. Real estate came out as a beneficiary of many measures floated by the Government of India. The year saw an unprecedented cut in repo rates, which led to the reduction of home loan interests that are hovering around sub-7%. Extensions were given to the developers to complete projects; funds were announced to ensure liquidity, and steps are taken that will help the stuck projects. RBI has also gone ahead with measures such as rationalization of risk-weightage norms, restructuring of loans based on the projects, and linking home loans to LTV. The real estate sector made a comeback in Q3 with sales and new launches rebounding to almost 70% of the pre-COVID-19 levels. The maximum sales were witnessed in Mumbai Metropolitan Region (MMR), National Capital Region (NCR), and Pune; all three regions accounted for almost 80 per cent of the sales in July-Sept quarter.”

Anurag Mathur, CEO, Savills India said, “2020 has been a watershed year for businesses and industries across the globe. Indian economy has weathered this unprecedented crisis fairly well, which is indicative of its strong inherent fundamentals. Going forward, policy steadfastness and implementation will hold the key to revival of investment. The investors will proceed with caution in early days, but 2021 is likely to experience a fair amount of PE investment owing to inherent strengths and potential of alternate asset classes in real estate.

The year 2020 has brought real estate to an inflection point. As the effects of the COVID pandemic unfolded across the world and India went into multiple phases of lockdowns, the impact on real estate was felt across the board. As the economy paved its way back to normalcy, demand for real estate recovered much sooner than expected. While most developers are reviewing expansion plans, few have faced challenges in existing portfolios. Rental collections in grade A office portfolios have been stable on the back of IT/ITes, financial services and technology firms boosting strong results. A successful listing of India’s second REIT in July has shown the strong faith that investors repose in commercial RE.


Indian economy has shown greater resilience and is now bullish towards revival from survival mode with GDP forecasts coming in positive scale.  In the case of residential real estate, pent-up demand, developer discounts and stamp duty waivers have created a temporary spurt in demand this year. Walk to work culture is now building up on come back to office momentum.

Dr Niranjan Hiranandani, National President – NAREDCO & ASSOCHAM giving an overview of the year said, “It was a tough year for the real estate sector due to the COVID-19 pandemic. After the first two months of January and February, housing sales were adversely impacted until September because of the lockdown and negative consumer sentiment. Our study showed that home sales were down 54 percent during the January to September period this year as compared with the corresponding period in 2019. However, sales started to recover from October onwards on account of pent up demand as well as a seasonal upswing in demand because of the festival season. On the positive side, while the pandemic hit sales, it accelerated the much needed adoption of digital tools in Indian real estate and led to a record increase in online traffic to digital real estate platforms. Moreover, the forced work-from-home environment because of COVID-19, boosted housing demand in tier-II and III cities.”

Ashok Mohanani, President, NAREDCO Maharashtra added, “Year 2020 was the most challenging time that Indian real estate has witnessed. With migrant labour reverse migrating; customers unable to visit project sites, liquidity crunch and breakdown in the supply chain, was a period of despondency. The silver lining to dark clouds was digital modes that came as a rescue to human interface, amidst enhanced automation and mechanization. Real estate players had to quickly brace up and tune their promotional and interactive activities via digital platforms to communicate with their visitors and prospects. These digital tools equipped home seekers with most of the relevant data and details about the project, product, location and the developer’s track record. Government and Apex bodies came up with innovative fiscal measures to deal with the real challenge of liquidity funding. The unanimous decision by NAREDCO Maharashtra to waive stamp duty completely on the sales of residential properties has added to the home buying euphoria and supported the Government’s efforts to push housing demand in the state.”

On the positive side, Dhruv Agarwala, Group CEO, Housing. com,, and Proptiger. com mentioned that while the pandemic hit sales, it also accelerated the much-needed adoption of digital tools in Indian real estate and led to a record increase in online traffic to digital real estate platforms. “Moreover, the forced work-from-home environment because of COVID-19, boosted housing demand in tier-II and III cities Business models will change, and low debt ratio with financial implications being closely monitored will be the norm. The industry will continue to seek low cost financing. ‘Customer centric’ will be the mantra from 2020 which will grow into the future.”


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